Risk factor
Weak & very vulnerable to price shocks
Profitability factor
Very low or no dividends
About
Capita plc, a London-based company established in 1984, offers a wide array of consulting, digital, and software-driven products and services. It caters to clients in both the private and public sectors, operating within the United Kingdom and across global markets. The organization structures its operations into three core divisions: Public Service, Experience, and Portfolio. Capita's service portfolio encompasses essential business functions, providing comprehensive solutions for financial management, accounting, procurement strategies, property and infrastructure oversight, and workplace administration, including travel and event coordination. The company is also deeply involved in enhancing customer interactions, offering expertise in customer experience transformation, contact centre operations, debt recovery, complaint resolution, client acquisition and retention, and the deployment of advanced CX systems and software, all supported by robust data analysis. Beyond these, Capita provides specialized digital policing and engineering services, along with licensing and technical support. Its offerings include bespoke education services and software tailored for local authorities, as well as platforms designed to facilitate seamless communication and integrated experiences among organizations, their customers, and suppliers. Capita is also a prominent supplier of services to central and local government bodies. In the human capital domain, its solutions span corporate learning, specialized training such as the Fire Service College, employability programmes, and apprenticeship schemes. HR-focused services extend to employer branding, flexible and agile workforce solutions, executive and specialist recruitment, background screening and vetting, and digital HR management and transformation initiatives. The firm is a significant provider of pension administration, software, and consulting, complemented by data-driven insights and remediation services. Technologically, Capita’s capabilities include automation, critical communication systems, and various software solutions for finance, payments, management information, and workforce management. It further delivers vital IT services such as cloud solutions, cybersecurity, digital connectivity, robotic process automation (RPA), and modern workplace IT infrastructure. Lastly, Capita offers expert services specifically designed for diverse sectors, including actuarial, defense, finance, healthcare, housing, legal, public safety, utilities, and welfare-to-work programmes. The company, originally incorporated as The Capita Group plc, rebranded to Capita plc in January 2012.
Company Valuation
Based on key historical and expected multiples, the stock is slightly undervalued relative to its peers. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBI
Target Price
The average target price of CPI.L is 478 and suggests 39% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increa