Open an account Help & support Register Account summary Log out
Skip Header
Home Stock market news

Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

JPMorgan reinstates coverage on Serco at 'overweight'

Mon 05 Aug 2024 07:53

(Sharecast News) - JPMorgan Cazenove reinstated coverage on Serco on Monday with an 'overweight' rating and a target price of 215p.

The bank said its analysis suggests that Serco can generate double-digit earnings per share growth in the medium term.

"Firstly, Serco's revenue growth (target 4-6%) is largely acyclical, given the exclusive focus on government customers," it said.

"Serco's strategy has been to expand further into attractive target markets, with a particular emphasis on US defence (deepening the current Navy focus and winning work elsewhere, e.g., with the Air Force/Space Force) as well as US civilian Federal services.

"Second, we see scope for margins to improve further, chiefly due to an improving mix (higher US exposure) and also due to a greater focus on contract profitability management (a key priority for this management team as evidenced in the 1H24 results).

"Third, Serco can continue to utilise its FCF for M&A and buybacks."

Citi said it used a discounted cash flow to derive its target price, but also considered a sum-of-the-parts approach that suggests Serco's current valuation does not give the stock full credit for its US defence exposure, giving circa 30% upside potential.

Share this article

Related Sharecast Articles

Fri 04 Sep 2026 12:27
BHP says it 'regularly explores options' after report Baowu eyeing iron ore mine stake
(Sharecast News) - BHP said on Friday that it "regularly explores options that may create long-term value to its shareholders" following a report that steelmaker China Baowu Steel Group is considering taking a stake in the company's Jimblebar iron ore mine in Western Australia.
Fri 04 Sep 2026 10:57
UK new car registrations jump as EV demand accelerates
(Sharecast News) - UK new car registrations rose sharply in August as demand for electric and hybrid vehicles strengthened, industry data revealed on Friday, although September is expected to provide a more meaningful test of underlying demand.
Fri 04 Sep 2026 10:57
JPMorgan reiterates 'overweight' on Prudential; cites cash conversion, buyback upside
(Sharecast News) - JPMorgan reiterated its 'overweight' rating on Prudential on Friday on cash conversion and buyback upside.
Fri 04 Sep 2026 09:19
Goldman upgrades Vodafone to 'buy', hikes price target
(Sharecast News) - Goldman Sachs upgraded Vodafone on Friday to 'buy' from 'sell' on higher relative returns and equity upside, despite its lower structural quality.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Awards

Award 1
Award 2
Award 3

Policies and important information

Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity, Equity & Inclusion | Diversity, Equity & Inclusion Reports | Doing Business with Fidelity | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Statutory and Regulatory disclosures | Whistleblowing programme

Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document or Product Summary document which contains important information about the fund.

This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.

© FIL Limited 2026