Analysts have raised Serco Group’s price target to £2.45, reflecting improved contract wins, stronger order book momentum, and enhanced margin guidance, despite ongoing caution around cyclical risks.
Analyst Commentary
- Bullish analysts are revising price targets upwards, citing improved contract wins and stronger order book momentum.
- Enhanced margin guidance and effective cost controls are leading to increased profit expectations.
- Recent operational execution and visible revenue growth underpin positive sentiment.
- Sector fundamentals appear resilient, supporting improved outlooks for government services providers like Serco.
- Cautious analysts maintain Hold recommendations, highlighting possible cyclical risks and valuation considerations despite recent uplifts.
What's in the News
- Deutsche Bank raised Serco Group’s price target to 215 GBp from 210 GBp, maintaining a Hold rating (Periodicals).
- Serco Group maintained full-year 2025 revenue guidance at approximately £4.9 billion, confirming an earlier upgrade driven by stronger immigration sector activity (Key Developments).
- Interim 2025 dividend was increased by 8% to 1.45p per share, payable on 3 October 2025 (Key Developments).
- In its half-year results, Serco reiterated its focus on disciplined cash and working capital management, with bolt-on M&A prioritized over buybacks to drive organic growth and access new markets (Key Developments).
- Management anticipates potential growth opportunities from increased European defense spending and is actively monitoring the landscape for relevant M&A and market expansion (Key Developments).
Valuation Changes
Summary of Valuation Changes for Serco Group
- The Consensus Analyst Price Target has risen slightly from £2.40 to £2.45.
- The Future P/E for Serco Group remained effectively unchanged, moving only marginally from 14.78x to 15.00x.
- The Net Profit Margin for Serco Group remained effectively unchanged, moving only marginally from 3.84% to 3.89%.
Disclaimer
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