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Investing.com - LSL Property Services (LSE:LSL) received a Buy rating initiation from Jefferies on Wednesday, with a price target of GBP3.81.
The property services company has transformed to a capital-light model over the past two years, achieving a return on capital employed exceeding 30%, according to Jefferies. The firm highlights LSL’s significant operational leverage to a recovery in UK housing transactions.
Jefferies forecasts LSL to achieve more than 15% growth in operating profit in 2025, with double-digit growth continuing beyond 2027. The firm calculates that a 10% increase in mortgage approvals above their current 5% growth assumption could provide approximately 15% upside to fiscal year 2026 EBIT estimates.
The research note indicates LSL trades at 9 times 2026 price-to-earnings, with Jefferies suggesting this valuation is underpinned by the sum of parts of the underlying business.
Jefferies also anticipates a strategy refresh from LSL management next year, potentially including greater focus on self-help initiatives to drive profitability and additional sources of structural growth across individual divisions.
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