Initiating the broker’s coverage of the consultancy firm, Liberum analyst Janardan Menon highlighted expectations for more value creating M&A.
The analyst added that management’s ability to rapidly turnaround the acquired Frontier business during the first half of 2020, amidst the pandemic, raises confidence in the company’s M&A capabilities.
“Science Group combines the organic growth and cash flows of its consulting business with internally funded M&A, to deliver strong earnings growth and share price outperformance,” Menon said in a note.
“Having weathered the COVID-19 storm well, we forecast the core R&D and regulatory consulting businesses to show steady growth in future years.
“We also expect the company to engage in more value creating M&A deals, both within consulting and elsewhere.”
Science Group shares rose 2.54p or 1.05% in Friday morning’s deals.