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Intertek: Oddo maintains 'reduce' rating; cuts target

(CercleFinance.com) - Oddo has reiterated its "reduce" rating on Intertek, trimming its target price for the share from 5,130 pence to 5,000 pence, despite what it says are solid annual results, a nice improvement in its margin, strong free cash flow generation and an increase in its dividend.

The broker however also points out an encouraging guidance from the UK certification group, along with the potential for improvements in its margin, a lack of any foreseeable acceleration in external growth and a priority set on shareholder returns.

Intertek has become the best in class in a sector in terms of margin and there is still potential for improvements, although this is reflected in the stock's valuation, where its current premium is twice that of its peers, tempers the analyst who monitors the stock.

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