BNP Paribas upgrades Serco on UK political risk, defence outlook
French bank lifts Serco to buy from hold, citing reduced UK political uncertainty and improved defence sector prospects.
BNP Paribas has upgraded shares of Serco Group to a buy rating from hold, citing easing UK political risk and an improved outlook for the company’s defence business.
The French bank’s decision reflects a shift in sentiment toward Serco, a UK-based services and defence contractor, following recent political developments in London. BNP Paribas noted that the reduction in uncertainty surrounding UK policy has supported a more constructive view of the company’s operating environment.
The upgrade also comes amid an improved outlook for Serco’s defence division, which has benefited from sustained government spending on security and military services. BNP Paribas highlighted the company’s exposure to long-term defence contracts as a key driver of its upgraded rating.
Serco’s shares have underperformed in recent months amid broader market volatility and sector-specific concerns. The upgrade by BNP Paribas signals renewed confidence in the company’s ability to navigate political and operational challenges while capitalizing on defence sector growth.
BNP Paribas set a price target of 330 pence per share for Serco, up from a previous estimate. The move follows similar upgrades from other analysts who have also cited improving conditions for the company’s core markets.
Serco did not immediately respond to a request for comment.
Priya covers listed equities and corporate earnings, reading quarterly results and guidance for what they signal about sector health and forward valuations.
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