Berenberg starts XPS Pensions at 'buy'

Analysts at Berenberg initiated coverage on consulting and administration firm XPS Pensions Group with a 'buy' rating and 440p target price on Wednesday, stating it was "a clear beneficiary" of an ever-evolving pensions environment and recent market volatility.

XPS Pensions Group
10 September 2025 10:56:43

Source: Sharecast

Berenberg highlighted that XPS has seen organic revenue growth rates of more than 17% per annum over FY23-25 and a doubling of FY22's adjusted underlying earnings performance.

While the German bank expects adjusted earnings per share growth to moderate to 3% in FY26 due to one-off factors, it also reckons the underlying recurring growth drivers in pensions to endure this, which, alongside further expansion into the adjacent insurance market, should mean that EPS rebounds to growth rates of 7-9% per year over FY27-28.

XPS recently entered the insurance consulting fee market, expanding its total addressable market to £4bn and extending its services' lives beyond the buyout stage.

"Considering this growth recovery and XPS's very high earnings quality, the recent pullback in the shares to a FY27 P/E of 15.2x, or EV/EBITDA of 9.6x provides an attractive entry point, in our view," said Berenberg.

Reporting by Iain Gilbert at Sharecast.com

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