RWS Holdings PLC (LON:RWS) shares moved higher as Barclays initiated coverage of the stock with an ‘overweight’ rating and target price of 560p.
Barclays said: “We think the combination of capital-light businesses (10x capital turnover) with high and defensible margins (~22%) in end-markets offering long-term mid-single-digit top-line growth makes RWS an attractive investment and justifies its premium valuation (22x Sep-19E P/E).”
READ: RWS jumps following final dividend hike as Moravia acquisition boosts earnings
Last month the translation and intellectual property firm reported a 43% jump in 2018 profit to £61.8mln, boosted by the acquisition of Czech translation service provider Moravia. Revenues soared 87% to £306mln.
The group also said it had made a “very good start” to the 2019 financial year with a “strong performance” in the first two months, underscoring its expectations of delivering another record year.
In morning trading shares gained 3.4% to 465p.