G4S boosted by Barclays upgrade

(ShareCast News) - Security services company G4S got a boost after Barclays upped its stance on the stock to 'equalweight' from 'underweight' and hiked the price target to 260p from 160p.The bank said it reckons this year will see a combination of high organic growth, cost savings and balance sheet deleveraging.Barclays' more positive view on organic growth and margins as well as favourable currency moves and the removal of its assumption of a credit rating downgrade lead it to upgrade its earning per share forecast for 2017 to 18.1p from 15.8p.The bank expects organic revenue to be 5% in 2017, which would be the fourth highest of the 30 business services companies it covers."The growth is supported by good contract wins and firm demand for security services. At the same time, after more than one false dawn, cost savings from multiple initiatives started by management in 2013 could now be set to come through."Improved cash conversion and further proceeds from the disposal of businesses are likely to reduce gearing, meaning management gets at least close to its 2.5x leverage target, removing debt as a drag on valuation and preserving the group's investment grade credit rating."At 1030 GMT, the shares were up 2.5% to 251p.