Panmure Liberum has maintained its buy recommendation on ZIGUP Zigup PLC (LSE:ZIG), the vehicle rental and fleet management group, with an unchanged target price of 625p.
The broker's research values the London-listed company at a market capitalisation of around £1.1 billion, against a share price of 474p at the close on 17 August.
Panmure Liberum forecasts underlying earnings before interest and tax, excluding vehicle sales, to grow by 15% in the 2027 financial year and 12% in 2028, driven by fleet expansion in the UK and Ireland and in Spain.
The broker said growth capital expenditure is expected to reach between £130 million and £135 million a year, funding additions to both the UK and Spanish rental fleets.
Integrated mobility solutions group, ZIGUP implemented a new operating and reporting structure for its UK&I business in May 2026, separating its activities into the Northgate Mobility and FMG divisions.
The broker forecasts net debt, including leases, to rise from around £999 million to £1.246 billion by April 2029 as the company continues to invest in fleet growth.
Panmure Liberum said the balance sheet remains well within its covenant limits, with the estimated £1,700 million book value of ZIGUP's vehicle assets substantially exceeding net debt.
The shares trade on around eight times Panmure Liberum's forecast 2027 earnings and offer a dividend yield of around 6%, with the broker highlighting strong earnings cover.
Within ZIGUP's FMG division, part of the Repair & Recovery segment, the group secured a new contract with Howden and renewed its relationship with Tesco Insurance, alongside a 10-year extension with National Highways.
ZIGUP also recently announced a strategic collaboration with Microsoft to introduce artificial-intelligence tools across its operations.
