MS sees 'a more stable story' for ISS, ups to 'equal-weight'

Iss A/S

10/09/2025 08:58

** Morgan Stanley upgrades ISS ISS.CO to "equal-weight" from "underweight", raises PT by 24% to DKK 179, seeing 'a more stable story' for the Danish service provider citing a better commercial momentum year-to-date

** Commercial momentum has "turned the corner" and should support mid-single-digit organic growth over the coming 18 months, it says

** MS notes that pricing and efficiency gains initiatives have more than offset labour cost inflation, paving the way for 5%+ operating margin in 2025

** The broker adds that the company's disciplined capital allocation has led to higher cash returns to shareholders than MS initially anticipated

** It estimates that ISS has the potential to return about 11% annual total yield on average between now and 2028 (about 3% dividend yield, 8% share buy-back)

** According to the brokerage, the investment case has stabilized, and combined with a shift in capital allocation towards returns to shareholders justifies the stock's recent re-rating

** Out of 13 analysts that cover the ISS stock, five rate it "strong buy"/"buy", seven rate it "hold", and one rates "sell"

 (Reporting by Marta Frąckowiak)

 ((marta.frackowiak@thomsonreuters.com))