RBC Capital starts Marlowe at ‘outperform’
Marlowe
490.00p
16:49 26/04/24
RBC Capital Markets initiated coverage of Marlowe on Wednesday with an ‘outperform’ rating and 630p price target.
FTSE AIM 100
3,637.40
17:14 26/04/24
FTSE AIM All-Share
755.28
17:14 26/04/24
Support Services
10,641.76
16:59 26/04/24
It noted that following the sale of its software & services assets on 22 February for £430m, Marlowe’s stock rebounded by around 18%, reflecting "a slight reversal of investor sentiment".
However, the shares are still trading at a significant discount to peers.
"We believe the remaining underlying business is solid with annual organic growth of 5% and margins of 12-14% and efficiencies should drive further margin improvement by 1-2% by F2027E," RBC said.
"With the new CEO search underway, the short-term business strategy is intact. We expect the acquisition strategy will return longer term, but at a more moderate pace."