RBS has upgraded the firm to “buy” from “hold” with an increased target price of 140p. The broker says Logica’s recent third quarter results point towards continued growth next year, and has raised its earnings per share estimate for 2011 by three per cent. It adds that the firm’s commitment to lower its gearing means the dividend could rise as it turns away from acquisitions.
UBS rates the construction firm “neutral” with an upgraded 12-month target price of 730p. It notes that parts of the business are showing sustainable growth and margin improvement, with particular strength in design and engineering. The broker has raised its earnings per share forecast for the year by five to six per cent, though it remains four per cent below consensus estimates.
Execution Noble rates the outsourcing group “sell” with a fair value price of 660p. The broker says that Capita’s recent £300m deal with Birmingham City Council provides welcome relief from its contract drought, but that turnover is likely to remain lower than last year. It adds that the share value is more realistic following a 14 per cent drop in price over the last month, but that better value lies elsewhere.