Source: Sharecast
Berenberg noted that James fisher was three years into a five-year strategic plan to deliver "stability, efficiency and growth". Of its three divisions - energy, defence and maritime transport - Bernberg said two were currently benefiting from renewed investment tailwinds, aiding revenue growth.
The German bank stated operational efficiency was being achieved through applying self-help measures, which it reckons should increase James Fisher's adjusted underlying earnings margin towards 10%. We see scope for a higher margin in the longer term.
"Since the high balance sheet leverage was resolved in late 2024, management has been focused on the removal of cost duplication from a decade of M&A (2009-19) without any serious integration. This is a key building block to achieve the 10% adjusted EBITA margin target," said Berenberg.
"The current valuation looks compelling, trading at a 20% discount to the 10-year average EV/NTM EBITDA despite James Fisher having its strongest balance sheet in seven years. Our 25% peer group discount has scope to reduce as margins improve. Removing the discount would give an implied valuation of 900p."
Reporting by Iain Gilbert at Sharecast.com