Broker snap: Prime Markets optimistic about Capita

23rd Feb 2012 11:21

Prime Markets recommends to buy outsourcing firm Capita saying that it expects the stock to performing strong in the coming weeks.Capita's full-year results this morning showed solid growth in revenues and profits, good visibility, a substantial order pipeline and an upbeat statement from its Chief Executive Officer (CEO), the broker said."The price action spiked sharply higher yesterday, breaking back through the benchmark 200-day moving average at 686p, and while the shares close end of day above this level, our next target is a retest of the late October 745p high within a two-four week timeframe," said the Head of Dealing Richard Curr.Shares dropped in October after the firm said it was seeing an adverse effect on a number of its trading activities due to pressure on spending. "Of particular note is the upbeat outlook statement from CEO Paul Pindar, which in our view signals that the woes of last October are consigned to history. Based on this, we believe the shares will naturally return to pre October tipping point levels," Curr said.Shares were performing strongly today, trading up 4.58% at 720p by 11:20.BC