Deutsche Bank upgraded its recommendation on shares of builders’ merchant Travis Perkins to ‘buy’ from ‘hold’ on Wednesday, lifting the price target to 2,056p from 1,707p as it noted that trading remains strong.
“Travis continued to trade well in the second quarter (particularly in its core merchanting division) and the company has raised its 2021 operating profit guidance to ‘at least £300m’ (we raise our forecast from circa £235m to £303m).”
The bank said it was upping its rating and price target on the shares “notwithstanding yesterday’s strong move”. Travis Perkins rallied in Tuesday’s session after it upgraded its full-year profit guidance.
Deutsche said the demerger of Wickes – a very good retail business that shares limited synergies with Travis Perkins – and the sale of the plumbing & heating distribution business leaves the group focused on trade, enhancing its capital allocation abilities.
At 0940 BST, the shares were up 0.6% at 1,734.50p.
