Deutsche Bank upgrades Capita to 'hold'
Outsourcer Capita got a boost on Tuesday as Deutsche Bank upped its stance on the shares to ‘hold’ from ‘sell’, noting that the stock is now down 20% from its post-election highs.
Capita
13.36p
14:49 26/04/24
FTSE 250
19,811.26
14:50 26/04/24
FTSE 350
4,465.87
14:50 26/04/24
FTSE All-Share
4,419.29
14:50 26/04/24
Support Services
10,625.99
14:49 26/04/24
"We harbour concerns that the costs of making Capita a ‘digitally enabled’ business process outsourcing provider will be excessive, but these are now more reasonably priced in, in our view," DB said.
The bank trimmed its price target on Capita from 155p.
"We have largely left our sum-of-the-parts intact from our downgrade note on Dec 18th, however, we have decided to marginally reduce the multiple we place on potential disposals to only 10x 20e EBITA down from 12x. This knocks our target price down to 150p," it said.
At 1055 GMT, Capita shares were up 2.4% at 150.25p.