David Farrell, an analyst from Jefferies, maintained the Hold rating on QinetiQ. The associated price target is p520.00.
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David Farrell has given his Hold rating due to a combination of factors surrounding QinetiQ’s strategic decisions and financial metrics. The company’s recent move to divest its non-core US Federal IT Services business aligns with its revised strategy to concentrate on more stable and growth-oriented sectors like maritime systems and advanced sensors. This shift is expected to reduce volatility and focus on areas with better growth prospects.
Despite the sale being consistent with QinetiQ’s strategic goals, the financial impact is relatively minor, with the transaction valued at $31 million, approximately equal to the business’s revenue. This valuation is slightly better than the company’s own assessment of its Global Solutions segment. However, the lack of significant financial impact from this sale suggests limited immediate upside potential for the stock, justifying the Hold rating.
Based on the recent corporate insider activity of 16 insiders, corporate insider sentiment is neutral on the stock.