Capita share price little changed as UBS trims valuation

on Jan 6, 2017
Updated: Oct 21, 2019

Shares in Capita (LON:CPI) have been little changed in London in today’s session after analysts at UBS trimmed their price target on the company, noting that the group was the worst performer in the support services sector last year. The comments come after the FTSE 100 company which provides services to banks, retailers and utilities recently trimmed its profit expectations for a second time in three months, with the move fuelling a selloff in the stock.

As of 13:14 GMT, Capita’s share price stood at 520.00p, flat in percentage terms, largely in line with the broader market, with the benchmark FTSE 100 index currently 0.10 percent worse off at 7,187.93 points. The group’s shares have lost more than 56 percent over the past year, as compared with an 18-percent rise in the Footsie.
UBS trimmed its valuation on Capita to 540p today, while reiterating its ‘neutral’ stance on the shares.

“Disposals, restructuring, and reinvestment are all required to return Capita to a path of long-term earnings growth but we do not think these New Year’s resolutions will be ticked off quickly,” the analysts pointed out, as quoted by the Guardian. “Around 10 times EV/EBITA, around 11 times PE (pro-forma for disposals) suggests the market is pricing in no long-term growth – but deflationary trends are only accelerating and we expect the UK environment to remain pressurised.”
The 20 analysts offering 12-month price targets for Capita for the Financial Times have a median target of 542.50p on the stock, with a high estimate of 1,090.00p and a low estimate of 440.00p. As of December 24, 2016, the consensus forecast amongst 27 polled investment analysts covering the support services group advises investors to hold their position in the company.
As of 13:53 GMT, Friday, 06 January, Capita PLC share price is 516.00p.

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