QinetiQ, the Industrials sector company, was revisited by a Wall Street analyst today. Analyst David Farrell from Jefferies maintained a Hold rating on the stock and has a p550.00 price target.
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David Farrell has given his Hold rating due to a combination of factors surrounding QinetiQ’s trading update and outlook. The company reaffirmed its FY26 guidance, pointing to modest organic revenue growth and stable EBITA margins, but the tone of management’s comments underlined a still-difficult contracting backdrop. Although order intake has improved enough to push the book-to-bill ratio above 1x year-to-date, Farrell does not view this as a strong enough indicator of a robust upswing in demand.
Farrell also highlights that the anticipated Defence Investment Plan, which was expected by year-end, has yet to be published, increasing the risk that the tough contracting conditions spill over into at least the first quarter of the next fiscal year. Against this backdrop, he sees current market expectations for FY27 organic growth as somewhat optimistic and susceptible to downward revisions following the update. The combination of limited near-term upside, ongoing contracting uncertainty, and potentially overstretched consensus estimates leads him to maintain a neutral, or Hold, stance on the shares.
Farrell covers the Industrials sector, focusing on stocks such as XP Power, Babcock International, and Chemring. According to TipRanks, Farrell has an average return of 11.8% and a 69.51% success rate on recommended stocks.
In another report released yesterday, TipRanks – Google also reiterated a Hold rating on the stock with a p521.00 price target.