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Investing.com - Morgan Stanley has upgraded ISS A/S (CSE:ISS) (OTC:ISFFF) from Underweight to Equalweight while raising its price target to DKK179.00 from DKK144.00.
The upgrade reflects Morgan Stanley’s assessment that the factors supporting its previous Underweight rating have weakened significantly. The firm notes that while large contract wins remain absent, ISS has experienced improved commercial momentum that should support mid-single-digit organic growth over the next year and a half.
Morgan Stanley highlights that ISS has successfully implemented pricing and efficiency initiatives that have more than offset labor cost inflation, positioning the company to achieve an operating margin exceeding 5% this year.
The research firm also points to ISS’s disciplined capital allocation strategy, which has resulted in higher cash returns to shareholders than Morgan Stanley had initially anticipated.
The new price target of DKK179.00 represents a significant increase from the previous target of DKK144.00, reflecting Morgan Stanley’s more positive outlook on the facility services provider’s business trajectory.
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