Uninspired is perhaps the best way to describe Shore Capital’s sense of today’s results from UK defence engineer QinetiQ Group PLC (LSE:QQ.) - nevertheless, in the CIty, the stock was up 8%, trading at 476.4p.
Shore Capital analyst Jamie Murray said full year results reported today were “as expected”, given QQ’s recent profit warning, whilst describing the firm’s guidance as “modest relative to the rest of the sector” and largely in line with the broker’s forecast.
At current levels, QQ shares trade on around 12 times EV/EBITDA, which, whilst representing a discount to sector peers, remains about right for Shore Capital.
“We believe QinetiQ’s current discount to peers is justified,” Jamie Murray said in a note.
“There’s not enough in today’s release to challenge that view, and we expect the shares to trade in line with the market.”
The broker has a ‘Hold’ rating for the London-listed share.
One positive, in Shore Cap’s view, was news of a key MoD contract – but, even then, Murray noted that it should be a surprise.
“While the renewal was widely expected, today’s announcement should ease any concerns surrounding the contract. We will make minor adjustments to our model, but our forecasts remain broadly in line with guidance, and we do not expect a material uplift,” the analyst added.