- Capita
- 06 February 2026 10:12:10
Source: Sharecast
"Low starting margins, leverage from key fixed cash costs and a spectrum of outcome assumptions yield a wide set of possible profit and cash flow destinations," the broker said.
"For those with an appetite for risk, we initiate with a buy rating and fair value estimate of £5.30, seeing an opportunity for upside as the group delivers on its plan for stronger margins medium term, transitions to positive adjusted FCF from this year and converts its opportunity pipeline into firm orders."
For others, more watchful for now, Shore detailed the milestones that if achieved could increasingly de-risk the outlook and narrow the landing zone of possible outcomes.
Shore pointed to three milestones for FY26 it is looking to for confirmation the group is on track.
Firstly, delivery of the positive free cash flow target from the end of FY25 as a meaningful pivot point versus group history.
Secondly, visibility forming on how Capita expects its profit dynamic to develop beyond this year and managing that transition smoothly. It noted the completed £250m cost savings plan - fully benefitting FY26 - has strongly underpinned performance since FY24.
Thirdly, the contact centre segment building green shoots of progress into stabilised revenues first and then a return to growth second. Shore said significant work has been done to raise its proposition and efficiency of delivery, yielding 100% UK renewals in H1 FY25.
"Evolving that into financial recovery is key to group plans," it added.