Canaccord Genuity hikes target price on XPS Pensions
Analysts at Canaccord Genuity raised their target price on financial services business XPS Pensions Group Plc from 435.0p to 376.0p on Thursday following "another year of impressive double-digit growth" in all key financial metrics in FY25.
XPS reported an 18% year-on-year jump in total revenues to £231.8m, a 27% increase in adjusted underlying earnings to £69.7m and a 22 basis point increase in adjusted EBITDA margins to 30.1%.
Following XPS' Thursday morning earnings, Canaccord Genuity said its forecasts had been tweaked, with a 1% uplift to revenue in FY26 and FY27, also resulting in a similar upgrade to adjusted earnings per share.
"In our opinion, XPS is a very well-managed business with a strong culture, high client retention, and multiple significant revenue opportunities, all of which should continue to support at least mid-single-digit percentage organic revenue growth in the medium term," said the Canadian bank, which reiterated its 'buy' rating on the stock.
"The defensive, regulatory-driven characteristics of the revenue model, while delivering operating leverage, remains very much a key attraction, in our view."
Canaccord Genuity noted that when arriving at its target price, it had taken the peer group's one-year forward price-to-earnings ratio of 20.5x and applied it to its CY26 EPS forecast. It also said its new target price implied a 22% upside and a total shareholder return of 26%.
Reporting by Iain Gilbert at Sharecast.com
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