Analysts at Berenberg lowered their target price on brewer C&C Group from 345.0p to 292.0p on Friday despite stating the group appeared to be positioning itself for recovery.
Berenberg stated C&C’s 2021 full-year results, with weaker-than-expected net revenues of 737.0m a wider than anticipated group operating loss of 59.0m, was a clear sign that trading had been “significantly affected” by the Covid-19 pandemic.
The German bank, which reiterated its ‘buy’ rating on the stock, also highlighted that C&C’s wholesale division was the driver of operating deleverage given its high fixed-cost base and 100% exposure to the UK on-trade.
However, Berenberg pointed out that the headline news in C&C’s latest update was the announcement of a £151.0m fully underwritten rights issue, to be completed by 23 June.
“Although unexpected, it does not change our positive view on the prospects for the group as the economy reopens. We account for this rights issue and adjust our price target to 292.0p (exrights), accordingly,” said the analysts.
Barclays lifted its price targets for Vistry and Countryside Properties on Friday as it said they are both leading players in Partnerships, which is a growth area within the UK housing market with increasing government support for development of all types of tenure.
The bank upped its recommendation on Vistry shares ‘overweight’ from ‘equalweight’ and upped the price target to 1,600p from 945p. It kept Countryside Properties at ‘overweight’ and hiked the price target to 585p from 510p.
It put the price target changes down to “strong” fundamentals and new sum-of-the-parts valuations.
“Overall, we forecast profit growth in the Partnerships divisions to outstrip that of the wider sector, while the relatively low capital requirements and improving margins drive high return on capital employed,” the bank said.
“The Housebuilding divisions continue to trade well, with a solid outlook for growth.”
Barclays’ new price targets imply potential upside of 23% for Vistry and 15% for Countryside.
