Mitie Group Share Price Forecast December 2021 – Time to Buy MTO?
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Shares of British strategic outsourcing and energy services company Mitie Group (LSE: MTO) are in the green today after closing at 60p as of December 17th (17:52 GMT). Mitie Group came into the limelight after acquiring Rock Power Connections, a supplier of power to EV charging points. Investors are wondering whether this will trigger an upward surge in the MTO share price.
Mitie Group – Technical Analysis
Mitie Group’s financial statement indicates that the market cap of £85.423 billion with total assets worth £176.75 billion. Revenue for 2020 was at £255.95 billion with a profit margin of -0.33% compared to £217.37 billion in 2019.
Oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(6.4), Williams Percent Range (14)(−79.4) and Bull Bear Power(−4.5) are neutral. Moving averages such as Exponential Moving Average (10)(61.8), Simple Moving Average (10)(62.5), Exponential Moving Average (20)(63.5), Simple Moving Average (20)(64.0) and Exponential Moving Average (30)(64.4) are indicating a sell action.
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Recent Developments
Founded by David Telling and Ian Stewart as MESL in 1987, Mitie Group was first listed on the London Stock Exchange in 1988. It got its present name after completing a merger with Highgate & Job in 1989. The company bought Interserve’s 40,000-strong facilities management business in a cash and shares deal worth £271 million, later revised downwards to £190 million back in June 2020. The firm was criticized for its management of a Covid-19 testing site where several workers contracted the virus.
Mitie Group is best known as a facilities management and professional services company but has recently entered the renewables category. Through the acquisition of Rock Power Energy, the company aims to enhance its green energy solutions, which have so far involved the installation of charge points. Compared to the overall picture, the acquisition is quite small at just £14.5 million to be paid by financial year 2023 which ends on 31 March 2023. The deal includes £10 million initial payment and a further two more payments of £4.5 million total related to performance targets. However, this only accounts for 0.7% of Mitie’s revenues.
The acquisition can be an important step for Mitie Group because of the growing focus on renewable energy at present. The UK government has already highlighted its Green Industrial Revolution which is a clear ten-point plan. The world’s biggest oil producers have already estimated that demand will decline within the end of the decade. On the other hand, EV companies such as Tesla have exploded in the stock market last year. All these points towards the fact that the future will be dominated by clean energy stocks. So Mitie’s strategic move will let it enter this market and repeat the benefits.
Should You Buy MTO Shares?
Mitie Group’s future looks bright in any case and it is positioned to be one of the best penny stocks for 2022. After last year’s pandemic low, the company is ready to make profits again as its revenue is on the up. However, investors may be worried about the inconsistency in profit-making. Mitie Group has experienced 3 losses in the last five years where full data is available. This is one of the reasons investors may want to keep a check on how their earnings shape up. For the time being, the company looks well on its track to enter the renewables market. Its latest acquisition is a step in the right direction, which make these shares favourable to buy right now.
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