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Highlights

  • Analysts from Investec Bank and Berenberg have reiterated a BUY rating on RWS Holdings, with price targets implying up to 159% upside.

  • The stock’s current target price stands at GBp 243.75, marking a potential 170.83% increase from the current level.

  • Despite margin pressures, RWS continues to demonstrate positive performance in AI-driven segments.

RWS Holdings Plc (LSE:RWS), a key player in the business support services sector, has attracted a bullish outlook from analysts, with recent BUY recommendations highlighting significant upside potential. As of 19 June 2025, the company has a consensus BUY rating (Rec Mean: 2.0) and a current average target price of GBp 243.75 — representing a staggering 170.83% expected upside from the current price of GBp 90.00.

The market optimism is backed by recommendations from reputable analysts such as Tom Callan of Investec Bank (UK) and James Bayliss of Berenberg, who have set price targets of GBp 180.00 and GBp 240.00, respectively. These targets indicate a potential rise of 94.59% to 159.46%

Positive Momentum in Organic Growth and AI-Focused Divisions

RWS reported a return to organic constant currency (OCC) revenue growth in H1 FY25, rising by 1.4%, a clear improvement from the 2% decline witnessed in H1 FY24. This signals steady operational recovery across three of its four divisions. The company also reported impressive client retention with 94% repeat service revenue and a record Net Promoter Score (NPS) of +51, reflecting enhanced client satisfaction.

The firm’s Language & Content Technology (L&CT) division continues to thrive, powered by increasing demand for AI-driven services. AI-related revenue now constitutes 26% of the Group’s total revenues, slightly up from 25% a year ago, showing a steady strategic shift toward technology-centric solutions.

Financial Challenges Remain, But Outlook Stable

RWS posted H1 revenue of £344.3 million, a 2% decline year-over-year. Gross margins contracted to 43.3% from 45.7%, mainly due to pricing pressure in Language Services and underperformance in Regulated Industries. Additionally, the ramp-up of TrainAI and activities in the Asia-Pacific region also impacted the mix.

Despite these challenges, the company maintained an interim dividend of 2.45p, in line with the prior year.

Outlook: Low Single-Digit Growth Anticipated for FY25

The management anticipates delivering low single-digit OCC growth for FY25, consistent with earlier guidance. Adjusted profit before tax is expected to range between £60 million and £70 million, assuming a GBP/USD exchange rate of 1.33 for H2 FY25.