Iss (iss.co) Nudging estimates higher ahead of 1H26 results

研报英文原文证据摘录

Iss (iss.co) Nudging estimates higher ahead of 1H26 results

Goldman Sachs ISS (ISS.CO)

1. Larger, recurring shareholder returns: Even after the re-rating, we see potential for

ISS to return up to almost 50% of market cap to shareholders over the next five

years, on top of a double-digit % shareholder return in 2025. This has been a key

part of our thesis and our mid-term buyback forecasts remain above consensus: we

forecast recurring buybacks of Dkr c.3bn p.a. over the next five years (c.6.5% of

market cap, and ahead of consensus, on top of a c.2% dividend yield. ISS screens as

among the most attractive GS-covered European stocks in terms of buyback

potential).

2. Improved fundamentals with faster, higher-quality organic growth and higher

margins: We expect ISS’s organic growth to improve sequentially to 6.7% in 2026

(up from 4.3% in 2025), and we are above consensus. The acceleration in our

forecasts is driven by stronger volume growth — particularly a sequential

improvement in net new contracts (e.g. the UK DWP contract, the 13 new contracts

signed since the start of 2025, and improved retention), along with solid LFL volume

growth (driven by strong momentum in expanding contracts with existing clients)

and improved trends in above-base work (driven by structural improvements, e.g.

stronger commercial ownership at the site level). Alongside this, our mid-term

margin and FCF forecasts are above consensus.

3. Upcoming CMD: With the resolution of the DTAG arbitration, ISS has announced it

will host a CMD on 14 September 2026. We believe the CMD will create an

opportunity for management to shift investor focus towards the mid-term earnings

growth algorithm, capital allocation optionality, and how the business has improved

since the last CMD in 2022.