FirstGroup PLC: Berenberg has revised its valuation outlook, setting a new target price of 240p, compared to the earlier estimate of 215p.

FirstGroup PLC: Berenberg has revised its valuation outlook, setting a new target price of 240p, compared to the earlier estimate of 215p.

FirstGroup plc (LON:FGP) has seen its share price cross above its 200-day moving average, reaching new highs and attracting renewed analyst attention. On July 2, 2025, the company's stock traded at GBX 232.76 ($3.18), a significant move that indicates a bullish sentiment among investors [1].

Bereneg Bank has recently revised its valuation outlook for FirstGroup, setting a new target price of GBX 240 ($3.29) compared to the earlier estimate of GBX 215 ($2.93) [2]. This upward revision reflects the positive momentum in the stock's performance, as well as the company's operational strengths and growth prospects.

FirstGroup's latest earnings report, released on June 10, 2025, showed earnings per share (EPS) of GBX 19.40 ($0.26) for the quarter. Despite the negative net margin of 0.34% and a return on equity of 2.54%, the company's strong operational performance has been a key factor in driving its stock price higher. Analysts anticipate that FirstGroup will post an EPS of GBX 17.38 for the current fiscal year [1].

The company's debt-to-equity ratio of 257.49 and a market capitalization of £1.30 billion suggest a high level of leverage, which could pose risks for investors. However, the company's strong market position in the UK public transport sector, along with its diverse operations through First Bus and First Rail segments, provides a robust foundation for future growth.

Insider activity has also been notable, with insider Ryan Mangold selling 950,000 shares of FirstGroup stock on June 13, 2025, at an average price of GBX 224 ($3.06) [1]. This transaction, while significant, does not appear to have had a substantial impact on the stock's price, indicating a level of confidence among insiders despite the sale.

In conclusion, FirstGroup plc's revised valuation by Berenberg Bank, coupled with its recent stock performance and operational strength, presents an intriguing opportunity for investors. However, the high debt-to-equity ratio and leverage should be carefully considered before making any investment decisions.

References:
[1] https://www.marketbeat.com/instant-alerts/firstgroup-lonfgp-shares-cross-above-200-day-moving-average-time-to-sell-2025-07-02/
[2] https://www.marketbeat.com/instant-alerts/firstgroup-lonfgp-hits-new-12-month-high-should-you-buy-2025-07-02/