Looking for a stock to positively surprise in reporting season? Everyone knows the IT services space is having a tough time…..but not this particular company. RXP Services (ASX:RXP) remains our highest conviction stock in the IT Service sector with the 2H14 result likely to see a strong rebound in earnings in both the acquired and established businesses. Sentiment continues to wane across the sector, however RXP continues to execute on its strategy and, in our view, is likely see a strong FY14 and positive outlook commentary. On a ~5x FY15 EV/EBIT multiple, the company trades at a ~40% discount to its peer group which is unjustified in our view. Our analyst, Owen ‘the Guru’ Humphries, is banging the table on this one despite the ‘Speculative Buy’ rating. Owen’s last research note from 19 June is available here: http://goo.gl/31KAR1
RXP Price at posting:
67.0¢ Sentiment: Hold Disclosure: Held
