Serco Group's consensus price target has been raised to £2.40, reflecting upgrades driven by stronger recent results, robust contract momentum, margin expansion, and improved confidence in revenue growth and international diversification.
Analyst Commentary
- Bullish analysts have increased price targets due to stronger-than-expected performance in recent results.
- Upgrades reflect positive outlook on revenue growth driven by robust contract wins and renewals.
- Improved cost management and margin expansion are cited as supporting higher valuation.
- Ongoing demand in government outsourcing markets underpins confidence in medium-term earnings visibility.
- Upward revisions also incorporate optimism about Serco's international pipeline and diversification strategy.
What's in the News
- Deutsche Bank raised Serco Group's price target to 215 GBp from 210 GBp, maintaining a Hold rating on the shares (Periodicals).
- Serco Group maintained its full-year 2025 revenue guidance at approximately £4.9 billion, reaffirming the previous outlook (Key Developments).
- The company announced an interim dividend increase to 1.45 pence per share for 2025, up 8% from the prior year's 1.34 pence; the dividend will be paid on 3 October 2025 (Key Developments).
- Serco reiterated its focus on bolt-on M&A opportunities to drive future organic growth, while also monitoring increased defense spending in Europe for potential market entry and expansion (Key Developments).
- First-half 2025 revenue guidance was set at approximately £2.4 billion, representing 2% year-on-year growth due to heightened activity in the immigration sector (Key Developments).
Valuation Changes
Summary of Valuation Changes for Serco Group
- The Consensus Analyst Price Target has risen slightly from £2.33 to £2.40.
- The Future P/E for Serco Group has significantly risen from 11.96x to 14.90x.
- The Net Profit Margin for Serco Group has risen slightly from 3.76% to 3.84%.
Disclaimer
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