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) - Analysts at Berenberg initiated coverage on consulting and administration firm XPS Pensions Group with a 'buy' rating and 440p target price on Wednesday, stating it was "a clear beneficiary" of an ever-evolving pensions environment and recent market volatility.
Berenberg highlighted that XPS has seen organic revenue growth rates of more than 17% per annum over FY23-25 and a doubling of FY22's adjusted underlying earnings performance.
While the German bank expects adjusted earnings per share growth to moderate to 3% in FY26 due to one-off factors, it also reckons the underlying recurring growth drivers in pensions to endure this, which, alongside further expansion into the adjacent insurance market, should mean that EPS rebounds to growth rates of 7-9% per year over FY27-28.
XPS recently entered the insurance consulting fee market, expanding its total addressable market to 4bn and extending its services' lives beyond the buyout stage.
"Considering this growth recovery and XPS's very high earnings quality, the recent pullback in the shares to a FY27 P/E of 15.2x, or EV/EBITDA of 9.6x provides an attractive entry point, in our view," said Berenberg.
Reporting by Iain Gilbert at Sharecast.com
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.