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On Friday, Deutsche Bank (ETR:DBKGn) raised the price target for Qinetiq Group (LON:QQ:LN) (OTC:QNTQY) to GBP5.50, up from GBP5.20, while reaffirming a Buy rating on the stock. The adjustment follows the company’s announcement of final results that slightly surpassed Deutsche Bank’s conservative predictions, with full-year 2025 EBITA reaching £185.4 million compared to Deutsche Bank’s estimate of £184.0 million and consensus of £186.4 million. Earnings per share (EPS) also exceeded expectations, coming in at 26.1p against Deutsche Bank’s forecast of 25.4p and consensus of 25.7p.
Qinetiq reported a net debt approximately £20 million lower than anticipated, standing at £133.2 million, with a robust cash conversion rate of 105%. The company’s leverage has been reduced to 0.4 times EBITDA. The firm experienced a record order intake, which increased by 12% to £1.95 billion, indicating a strong end to the year despite challenging contracting conditions. The book-to-bill ratio was reported at 1.2 times.
Additionally, Qinetiq announced a significant five-year extension of its Long Term Partnering Agreement (LTPA) valued at £1.54 billion for the non-tasking element, which is projected to grow from the current estimated annual run-rate of around £270 million. This extension elevates the company’s order backlog to approximately £5 billion.
Looking ahead to fiscal year 2026, the company has set guidance towards the lower end of the range provided in March. In response to this guidance, Deutsche Bank has slightly reduced its fiscal year 2026 EBITA estimate to £215.7 million, a 2% decrease, and EPS forecast to 31.0p, a 1% reduction. Even with these adjustments, the order cover for the company remains strong, estimated at around 75% when including unfunded orders from the United States.
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