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Investing.com - Canaccord Genuity initiated coverage on Capita Plc. (LON:CPI) (OTC:CTAGF) with a Buy rating and a price target of GBP9.00 on Monday.
The research firm believes Capita’s turnaround has reached an inflection point and is gaining momentum after a period marked by challenges and asset disposals.
Canaccord highlighted the Public Service segment, which represents approximately two-thirds of group sales, describing it as a healthy outsourcing business with good forward visibility, mid-single-digit organic growth, and improving margins.
The firm identified Pension Solutions as the "jewel in the crown" with a solid mid-single-digit growth outlook and mid-teens margins, while characterizing the Contact Centre business as Capita’s "problem child" that operates around break-even and may be non-core in the future.
Canaccord also noted Capita’s significant push to integrate advanced technology and Generative AI across all operations, which should improve customer outcomes, growth prospects, efficiency, and margins.
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