Wincanton is lowly rated and still has appeal longer term according to broker Liberum after a meeting with management.
“We see scope for optimism. Macro pressures on Wincanton’s customers should ease on a 6-12 month view, and reduced pension contributions could allow the group to accelerate investment into automation technology.
“In turn, this could support better margins and contract retention rates”.
Logistics group Wincanton shares have tumbled recently after a profit warning following the loss of a key contract with HMRC.
Liberum, believes though, that the contract was an ‘outlier’ and unlikely to herald further contract losses.
Low retail volumes are another headwind, but Liberum suggests these are now reflected in the rating of 5.2 times 2025 earnings with the possibility of the pension revision boost still to come.
Buy with a 400p target is Liberum’s view.