RE: Tuesday 5th August30 Jul 2025 08:54
From ADVFN interesting the old foe now a cheerleader, wonder why 🤔😂
For anyone who missed it, RBC Capital Markets has raised their price target on Capita this morning from 300p to a new 400p, while reiterating their 'Outperform' rating.
While any upgrade is welcome, it's essential to understand why this specific note from RBC carries significantly more weight than a typical analyst update. The key thing to remember is that RBC is not just a detached observer. As announced on July 2nd, RBC is one of the new, high-quality banks that joined Capita's core RCF lending syndicate. Before committing their own capital to a £250m+ facility, they would have conducted extensive, non-public due diligence on the entire business, its management, its financial models, and its strategic plan.
This upgrade, coming so soon after they joined the syndicate, is essentially the public-facing vote of confidence that their credit risk team already made privately. They have looked "under the bonnet," and they clearly like what they see.
This has several powerful implications for the investment thesis here:
Powerful Validation: It strongly suggests that the turnaround plan, the path to being FCF positive by year-end, and the margin improvement targets are credible and stand up to the highest level of institutional scrutiny.
Context for Recent "Noise": It provides important context for recent concerns. A major financial partner, having done its homework, has assessed the known risks (like the Ofgem investigation) and has still come out with a very bullish stance
Major Endorsement of Management: This is a significant external endorsement for Adolfo Hernandez and his team's strategy and their ability to execute it.
In my view, this is arguably the most significant broker note we could have received. It's not just an opinion; it's an opinion backed by the due diligence required to make a major lending decision. It's a strong signal that the institutional 'smart money' is confident in the trajectory.
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