RBC Capital upgrades Capita to ‘outperform’
RBC Capital Markets upgraded Capita on Monday to ‘outperform’ form ‘sector perform’ and lifted the price target to 2,000p from 1,700p as it said the risk/reward was now in favour.
The bank said full-year results and guidance were as expected.
"The new news was greater disclosure around the Experience division. Pensions Solutions business is making much more money than we thought and Contact Centre business much less, in fact nothing," RBC said.
"This has positive implications for our sum-of-the-parts valuation."
RBC said it believes the "risk reward is now in favour" and noted "we are at last getting closer to the point Capita becomes free cash flow positive".
At 0930 GMT, the shares were up 3.1% at 14.14p.