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Investing.com - Berenberg initiated coverage on Spanish technology and defense company Indra Group SA (IDR:SM) (OTC:ISMAY) with a Buy rating and a price target of EUR41.00 on Wednesday. The company, currently valued at $7.23 billion, has demonstrated remarkable performance with a 140.7% return year-to-date.
The research firm cited Indra’s strategic shift toward its more profitable Aerospace and Defence (A&D) business as a key factor in the positive outlook, noting management plans to allocate more than 75% of capital to this growing segment.
Berenberg highlighted the company’s historical roots, pointing out that Indra was founded in 1993 as part of a Spanish government initiative to consolidate defense and information technology expertise into a national champion.
The firm acknowledged that while Indra’s strategy "comes with some execution risk," its current valuation appears "too cheap to be ignored" based on growth prospects in the defense sector.
Indra Group remains "firmly anchored in its roots" with new management making "no secret of its intention to build a national defence champion," according to Berenberg’s analysis.
In other recent news, Indra Sistemas has seen significant attention from major financial institutions. Goldman Sachs has upgraded its stock rating for Indra Sistemas from Neutral to Buy, with an increased price target of EUR45.00. This change is attributed to anticipated advantages from rising European defense spending, which is expected to significantly impact Indra’s defense business. Meanwhile, Morgan Stanley has also upgraded Indra Sistemas from Equalweight to Overweight, raising its price target to EUR47.00. This upgrade is based on expectations of strong growth in the defense sector and a steady performance in the company’s core IT Services business. Morgan Stanley projects an approximately 8% organic total revenue compound annual growth rate (CAGR) for Indra between FY24-27, potentially reaching 10% with mergers and acquisitions. These recent developments highlight the growing confidence in Indra Sistemas’ future performance amid favorable industry trends.
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