Jefferies analyst David Farrell maintained a Hold rating on QinetiQ yesterday and set a price target of p520.00.
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David Farrell’s rating is based on a combination of factors, including QinetiQ’s recent trading update which, although expected to be light on details, did not provide clarity on the current revenue cover for the fiscal year 2026 forecast. Despite this, the company has indicated that it is on course to meet its efficiency targets in the US and maintain its revenue expectations, having started the year with 75% revenue cover. This suggests stability in their financial outlook without any anticipated changes to consensus estimates for FY26.
However, Farrell notes a potential imbalance in revenue and EBITA margins between the first and second halves of the fiscal year, with a greater skew towards the first half than currently reflected in consensus estimates. While the recent UK Intelligence contract awards are promising, aligning with revenue forecasts, the overall muted reaction in the share price suggests that the market is cautiously optimistic but not overwhelmingly positive about the company’s near-term prospects. Therefore, a Hold rating is deemed appropriate given these mixed signals.
Based on the recent corporate insider activity of 17 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of QQ in relation to earlier this year.