On Friday, UBS increased its price target for Service Corp. International (NYSE:SCI) shares to $85 from $83, while maintaining a Buy rating on the stock.
The adjustment follows the company's reaffirmation of its long-standing goal for annual earnings per share (EPS) growth of 8-12%. Service Corp.
International's management highlighted the company's historical performance, noting that it has achieved an average annual EPS growth of 14% over the past 15 years.
The company's leadership expressed confidence that Service Corp. can meet or exceed its EPS growth target 90% of the time. They also projected that the company is capable of surpassing the 12% growth rate in 30-40% of the years, potentially reaching 12-16% growth during those periods.
This outlook suggests that while the 8-12% range sets a consistent expectation for growth, it does not limit the possibility of higher gains, which are anticipated to occur with some regularity.
Service Corp. International's strategy aims to provide stakeholders with a sense of certainty that the company will regularly outperform the lower end of its EPS growth range.
The management's commentary indicates a strong belief in the company's ability to sustain its growth trajectory and occasionally achieve even higher rates of expansion.
The updated price target by UBS reflects the firm's assessment of Service Corp.'s growth prospects and its potential to consistently achieve and sometimes exceed its EPS targets.
The company's track record and management's optimistic projections contribute to the positive outlook maintained by the analyst.
Investors and market watchers may view UBS's revised price target and the maintained Buy rating as a sign of the firm's confidence in Service Corp. International's financial performance and strategic direction.
The company's commitment to its growth targets underscores its focus on delivering value and its ability to navigate the market effectively.
InvestingPro Insights
Service Corp. International's commitment to growth is underscored by its impressive track record of raising its dividend for 20 consecutive years, as noted in an InvestingPro Tip. This demonstrates a strong financial discipline and a shareholder-friendly approach. Additionally, another InvestingPro Tip indicates that despite some analysts revising their earnings downwards for the upcoming period, the company has maintained consistent profitability over the last twelve months.
From an investment standpoint, the real-time data from InvestingPro shows Service Corp. International with a market capitalization of $10.31 billion and a P/E ratio of 20.3, which is slightly high relative to its near-term earnings growth. The company's Price / Book ratio stands at 6.48, which suggests a premium valuation compared to its book value. However, with a dividend yield of 1.7% and a recent 11.11% growth in dividends, investors may find the stock an attractive option for both growth and income.
For those interested in a deeper analysis, there are further InvestingPro Tips available at https://www.investing.com/pro/SCI, which provide additional insights into Service Corp. International's financial health and market performance. Readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, granting access to an extended list of tips that can help in making more informed investment decisions.
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