Deutsche Bank (ETR:DBKGn) raised its price target on Mitie Group PLC (LON:MTO) to GBP1.70 from GBP1.65 on Monday, while maintaining a Buy rating on the facilities management company's stock. The company has demonstrated strong performance with a 31.4% price return over the past six months and maintains healthy financials with a 3.25% dividend yield. According to InvestingPro analysis, the stock currently appears undervalued based on its Fair Value model. The price target increase follows Deutsche Bank's assessment of Mitie's acquisition of Marlowe, which it describes as having "compelling industrial logic" by adding exposure to the facilities compliance market. Deutsche Bank highlighted several attractive characteristics of the facilities compliance market, noting it is fragmented, non-discretionary, accretive to gross and EBIT margin, and follows a route density model. The bank's analysis suggests significant medium to long-term potential, with updated forecasts indicating the possibility for greater than 14% EPS CAGR through fiscal year 2031. Deutsche Bank's updated forecasts reflect a slightly more cautious view on Marlowe consensus profit forecasts and a more conservative phasing of the published £30 million cost synergy target compared to its previous analysis. In other recent news, Mitie Group has announced a significant acquisition of Marlowe, which has prompted a reassessment of its market position. This development led Jefferies to downgrade Mitie Group from a Buy to a Hold rating, with a new price target set at GBP1.45. The downgrade reflects a shift in the company's investment strategy, as noted by Jefferies, due to the substantial nature of the Marlowe acquisition. This marks a departure from Mitie's previous investment approach, which had seen its shares rise approximately 30% this year. The recent change in strategy has led analysts to take a more cautious view of the company's future performance. These developments are part of a broader set of recent changes for Mitie Group. Investors will be closely watching how the acquisition impacts Mitie's financial results and market strategy moving forward. _This article was generated with the support of AI and reviewed by an editor. For more information see our T&C._

Deutsche Bank raises Mitie Group price target to GBP1.70 on Marlowe acquisition

Deutsche Bank lifted its price target for Mitie Group PLC to GBP1.70, citing the company’s strong recent performance and the strategic value of its acquisition of Marlowe. The bank highlighted the attractive characteristics of the facilities compliance market and projected a >14% EPS CAGR through FY2031, while also adjusting its synergy expectations. Jefferies, meanwhile, downgraded Mitie to a Hold with a lower target of GBP1.45, reflecting concerns over the acquisition’s impact on the firm’s strategy.