No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Citi cut its price target on Qinetiq on Wednesday to 510p from 530p as it said near-term uncertainty was an overhang but long-term value remains.
Citi said it was updating its forecasts following the recent profit warning. It now sees Qinetiq achieving closer to 2.1bn of revenue in FY27, versus around 2.4bn previously, with its mid-term EBIT forecast moving approximately 15% lower.
"The fair value impact is somewhat offset by the value accretion of the 200m share buyback over next two years," Citi said.
The bank said it still believes the stock is undervalued given the healthy cash generation, relatively unlevered balance sheet, and growing European defence spend.
"However, near-term, the uncertainty around the US business and headwinds ahead of UK Strategic Defence Review are likely to be an overhang until clarity emerges around the political decision making in both countries."
Citi maintained its 'buy' rating on the stock.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.