Optimistic Buy Rating for Mobico Group Amid Growth Potential and Improved Financial Performance

Matthew Copeland, an analyst from Jefferies, maintained the Buy rating on Mobico Group (MCG – Research Report). The associated price target remains the same with p90.00.

Matthew Copeland has given his Buy rating due to a combination of factors that highlight Mobico Group’s potential for growth and improved financial performance. Despite the recent challenges, including a lower-than-expected disposal value for the North America School Bus division and concerns about leverage, the company is showing signs of a positive trajectory. The focus on the remaining business, or ‘remainco,’ indicates a leaner and higher-growth operation, with expectations of a 10% revenue increase in FY24 compared to a 4% increase for the NASB.
Furthermore, the remainco is projected to achieve higher margins, with an EBIT margin of 6.8%, which is a promising indicator of profitability. The company’s valuation, trading at 6.8x EV/EBIT, suggests that there is room for growth compared to previous figures. These elements, combined with the expectation of revenue and EBIT growth, underpin Copeland’s optimistic outlook and justify the Buy rating for Mobico Group.