Berenberg hikes target price on Travis Perkins

by | Mar 31, 2023

Analysts at Berenberg hiked their target price on builders’ merchant Travis Perkins from 890.0p to 1,000.0p on Friday but said “strong headwinds” still dominated.
Berenberg stated Travis Perkins’ broad-based exposure across the UK construction ecosystem left the firm “well positioned” to benefit from what it expects to be “modest long-term growth” in construction demand.

However, in the near term, Berenberg thinks lower demand and continued cost pressures will be the dominant factors, driving both its expectation of lower profits in 2023 and its “continued neutral stance”.

The German bank, which reiterated its ‘hold’ rating on the stock, did note that while it worries about negative earnings momentum in 2023, it still considers the group “financially solid”.

“With the stock trading on 12x EPS and 6x EBITDA, and with a 10% FCF yield, we view the valuation as fair but not cheap enough to overcome near-term concerns about market headwinds. We consider a ‘hold’ rating appropriate for now,” said Berenberg.

Reporting by Iain Gilbert at

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