Stifel Nicolaus analyst Sam Dindol maintained a Hold rating on Ricardo (RCDO – Research Report) today and set a price target of p280.00.
Sam Dindol has given his Hold rating due to a combination of factors impacting Ricardo’s financial performance and outlook. The company’s interim results showed a slight increase in revenue and a significant improvement in operating profit compared to the previous year. However, the Emerging A&I segment faced challenges, leading to a substantial impairment, and cash conversion was notably weak.
Despite these challenges, Ricardo has re-adjusted its medium-term financial targets, expecting moderate organic growth and improving operating margins. The order book and intake have shown positive trends, but the overall outlook remains cautious due to macroeconomic uncertainties and sector-specific headwinds. The current valuation is considered fair, with leverage expected to rise, and the interest from Science Group adds a layer of complexity to the situation.
Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of RCDO in relation to earlier this year.
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