RBC Capital starts Marlowe at 'outperform'

(Sharecast News) - RBC Capital Markets initiated coverage of Marlowe on Wednesday with an 'outperform' rating and 630p price target.

It noted that following the sale of its software & services assets on 22 February for £430m, Marlowe's stock rebounded by around 18%, reflecting "a slight reversal of investor sentiment".

However, the shares are still trading at a significant discount to peers.

"We believe the remaining underlying business is solid with annual organic growth of 5% and margins of 12-14% and efficiencies should drive further margin improvement by 1-2% by F2027E," RBC said.

"With the new CEO search underway, the short-term business strategy is intact. We expect the acquisition strategy will return longer term, but at a more moderate pace."