US investment firm Citi has proposed that QinetiQ Group PLC (LSE:QQ.) could greatly benefit from a share buyback programme.
This suggestion comes in response to the defence contractor's share price underperformance this year.
Citi's analysis indicates that £500 million could potentially be deployed to repurchase stock and could be more financially advantageous than the equivalent expenditure on acquisitions as it would be value accretive, not just earnings enhancing.
Such a strategy, Citi believes, would likely be received positively by the market. This recommendation offers a strategic alternative for QinetiQ in navigating the current financial landscape and enhancing shareholder value amidst market fluctuations.
In mid-afternoon trading, the stock was marking time at 279.79p, valuing the business at £1.73 billion.