Broker snap: Carillion to go organic

11th Jan 2010 11:50

Having reshaped its portfolio through mergers and acquisitions activity for the past five years, 2010 should see support service group Carillion's emphasis shifting to organic opportunities, according to Morgan Stanley.The broker starts coverage on the stock with an overweight rating and a 380p target price. It notes that Carillion's primary value driver, the support services division, had a good track record of high single-digit revenue growth between 2004 and 2008, though this will remain under cyclical pressure.'Carillion is our preferred play on the prospect of increased public sector outsourcing,' says Morgan Stanley.