Morgan Stanley analyst Remi Grenu upgraded the rating on ISS to a Hold today, setting a price target of DKK179.00.
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Remi Grenu has given his Hold rating due to a combination of factors that reflect a balanced outlook for ISS. The company’s commercial momentum has improved, suggesting mid-single-digit organic growth in the upcoming months, despite the absence of large contract wins. Additionally, ISS’s initiatives in pricing and efficiency have successfully countered labor cost inflation, positioning the company to achieve a 5%+ operating margin this year.
Furthermore, ISS’s disciplined capital allocation strategy has resulted in increased cash returns to shareholders, with an estimated annual total yield of approximately 11% through FY28. Although the valuation of ISS is not considered demanding, trading at a discount compared to historical averages and peers, some uncertainties remain, such as the DTAG contract and the Americas turnaround. These factors contribute to the decision to maintain a neutral stance with a revised price target of DKK 179.
According to TipRanks, Grenu is an analyst with an average return of -0.1% and a 48.57% success rate. Grenu covers the Services sector, focusing on stocks such as Teleperformance, Adecco Group AG, and Randstad Holding NV.
In another report released on September 2, UBS also maintained a Hold rating on the stock with a DKK190.00 price target.