Analysts at Canaccord Genuity raised their target price on householder MJ Gleeson from 810.0p to 850.0p on Friday after the group’s interim results confirmed “a good recovery” from 2020’s initial lockdown.
Canaccord said MJ Gleeson had seen “a good bounce back in demand”, with build rates recovering well, allowing it to deliver a good set of results and be on track to deliver full-year completions above its pre-coronavirus levels.
While Canaccord highlighted that the trading outlook and nature of MJ Gleeson’s recovery remained “very important”, it also feels the key focus now turns to the next stage for the company.
“Being close to reaching its 2,000 unit target, it will soon review its medium-term targets and along with them its capital allocation policy. We suspect the group will set out a new medium-term completion target with the key characteristics of the business model remaining unchanged,” said the analysts.
The Canadian bank believes MJ Gleeson to be “well-positioned in an attractive part of the housing market”, which should see good demand for the foreseeable future, leading it to hike its target price and reiterate its ‘buy’ rating on the stock.
Analysts at Berenberg lowered cruise operator Carnival from ‘hold’ to ‘sell’ on Friday, citing significant headwinds for the industry not yet factored into the group’s current share price.
Berenberg said it fully expects pent-up demand for the industry to be “a significant tailwind” for the cruise sector in 2021 but stated that after looking at the overall enterprise value, Carnival has fallen a modest 1.5% since the end of 2019.
“We do not think this is a fair reflection of the increased risks faced by the operators, not least of which is the further transfer of value from shareholders to debtholders through the remainder of the suspension of service,” said the analysts.
The German bank, which raised its target price on the stock from £8 to £10, noted that after looking at the three-year forward multiples for Carnival relative to where its shares were currently trading, it saw they were at “a meaningful premium”.
“Carnival is still trading at a comfortable premium to our three-year forward multiples prior to the pandemic and more in line with RCL. In context, we have Carnival trading at 15x 2023 earnings which would be the top end of it historical range compared to an unrealistic 28x at the current share price,” concluded Berenberg.
Liberum initiated coverage of shares of John Laing on Friday with a ‘buy’ rating and 350p price target.
It noted that since the IPO in 2015, John Laing has delivered an average annual total shareholder return of 18% through a blend of capital growth and dividends.
“Its distinctive business model means it is an early-stage investor, which invests its own balance sheet capital. The company has had some challenges in the renewable energy market, which is not an area of expertise.
“However, it has a track record of achieving a 3x money multiple in Greenfield public-private partnership assets due to its strong heritage, skilled workforce and impressive performance in the market.”
Liberum said the weighted average discount rates used by the company are high, leaving potential for plenty of upside in the valuations of its assets as portfolios mature.
“After the sale of IEP and Australia wind, and the write-off of the biomass assets, it has over 30 projects invested globally, which lowers the risk profile of the portfolio through diversification,” it said.
Liberum added that the company has a strong balance sheet and recent realisations in the portfolio mean it has plenty of liquidity to reinvest.
