BofA upgrades Kainos to 'buy', shares surge

(Sharecast News) - Kainos surged on Monday after Bank of America upgraded the shares to 'buy' from 'underperform' and hiked the price target to 1,290p from 960p. The bank said it reckons that better growth momentum can help drive a further re-rating for the IT services provider.

BofA said it sees a sustainable return to strong topline growth over the mid-term, helped by a record backlog and robust bookings momentum.

This is driven by UK contract wins, a return to growth in Workday Services, and strong annual recurring revenue growth in Workday Products.

The bank said: "We believe its unique positioning, strong growth and increasing revenue share of software products should drive a further re-rating."

At 1415 GMT, the shares were up 7% at 1,159p.