UBS gave a boost to blue chip security services group G4S PLC (LON:GFS) today, upgrading its rating for the firm to ‘buy’ from ‘neutral’ in a European sector review.
The Swiss bank also hiked its target price for the FTSE 100 listed-firm to 310p from 300p, with the shares changing hands at 282.4p each in mid-morning trading, up 2.6% or 7.2p on Friday’s closing price.
READ: G4S slumps as it lowers revenue outlook after flat performance in Middle East and India
In the note to clients, the UBS analysts said: “Our deep dive into the cash handling industry sees a market set to accelerate into its next phase of evolution through a wave of third generation outsourcing solutions and wide-scale industry consolidation.”
They added: “Our second UBS Evidence Lab survey suggests accelerating penetration of digital payments, and our analysis sees opportunities for some vendors to break away from the pressures in traditional ex-growth services and re-accelerate growth within new market segments. We also see prospects for consolidation, which should favour large global players.”
READ: Jefferies International gives G4S a boost, upgrading its rating to ‘buy’ from ‘hold’ citing valuation grounds
The analysts said they believe these shifts are underestimated at G4S, hence their upgrade to buy.