BofA Resumes ISS Coverage at Buy on Improved Business Quality

06:52 AM EDT, 07/21/2026 (MT Newswires) -- BofA Global Research restarted its coverage of ISS A/S (ISS.CO) with a buy rating and price objective of 334 Danish kroner, highlighting improvements in the facilities management services company's financial and operational metrics. "We have re-appraised the ISS change story and see clear evidence of quality improvement noting: i) c25% of the business has been sold, ii) client retention has risen 4pts, iii) revenue per employee is outpacing inflation by 2x and iv), hiring needs have fallen 56%. Free cash flow conversion is over 100%," according to a Monday note. Against this backdrop, the research firm projects 18 billion kroner in shareholder returns by full-year 2030, representing 42% of its market cap, alongside room for selective bolt-on acquisitions due to deleveraging. The scale of these potential buybacks, backed by an estimated 109% free cash flow conversion and a one-off boost from a 2026 dispute settlement with Deutsche Telekom (DTE.F), underpins BofA analysts' forecast of 19% EPS compound annual growth rate through 2028. "Is c7% organic EBIT growth sustainable? Ahead of the September Capital Markets Day (CMD), we model 13% in 2026E and then 7% across 2027/28E. We see upside risks stemming from further gains on client retention (now 94%), US growth optionality (although this needs to be approached carefully) and labour efficiency helped by a tighter business (headcount down 40% since 2011)," BofA wrote.