John Laing a ‘buy’ on growing pool of investment opportunities – HSBC

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John Laing‘s growing pool of public-private partnerships and renewable energy investment opportunities should allow the company to grow 12% a year through to 2019, said HSBC as it restarted coverage of the stock with a ‘buy’ recommendation.

HSBC said Laing’s investments opportunities are in low risk territories in Europe, North America and Australasia, “where there is political support for PPP and a rising weight of secondary investment funds that exceeds the flow of finished projects”.

Opportunities in these territories are expected to structurally rise in both PPP and renewables, which the group can access through the network of offices, most recently expanded in the US.

“We see PPP investment as the most expedient means of realising infrastructure demand,” while HSBC’s climate change strategist, Ashim Paun, has set out expectations for the renewable energy provision to increase by multiples of up to 3.3 times current levels by 2030 in the group’s key markets.

Analyst set a 340p share price target that projects a rise to a 20% premium to net asset value to reflect the growth prospects in both investment pools and the group’s advantageous position and track record for realising surpluses.

“The shares would rise a further 12% per annum if our 2019 NAV forecasts are realised and the premium is maintained, with our forecasts marginally ahead of consensus.”

The dividend is forecast to rise 31% in the three years to 2019 to produce a yield of 3.7%.

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