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Investing.com - RBC Capital initiated coverage on Keller Group Plc. (LON:KLR) (OTC:KLRGF) with a Sector Perform rating and a price target of GBP15.40.
The research firm noted that Keller has executed well since 2019, but suggested that margins are approaching a structural ceiling, limiting further organic improvement.
RBC Capital identified transformational growth as Keller’s next necessary step, observing that while the company has significant financial capacity for acquisitions, it currently lacks a clear strategy for deployment.
The firm highlighted that U.S. construction spending remains the key earnings driver for Keller, with an 81% correlation since 2006, though the near-term outlook for this metric appears mixed.
RBC Capital recommended that Keller hold a Capital Markets Day to provide clarity on margin sustainability and present a growth strategy that could outperform the market, suggesting investors may remain hesitant until such plans are articulated.
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