- Howden Joinery Group
- 03 March 2025 13:00:41
Source: Sharecast
"While Howdens remains a compelling multi-year investment poised to benefit from UK RMI recovery, the stock may be more range-bound in the coming 12 months," Jefferies said. "Not only does new guidance suggest market demand has yet to bottom, but paring back of expectations for other elements of the business means there is little to offset demand jitters for now."
The bank said that at 18.7x 2025 estimated price-to-earnings, Howdens trades at the upper end of its historical range despite recent share price weakness.
Jefferies said the long-run investment case in intact.
"We continue to see Howdens' long-run equity story as compelling - scope for above-market growth, sector-leading margin with further upside, and strong cash generation/ balance sheet underpinning optionality for capex, M&A and extra cash returns," it said.
"We see the 2024 results as confirming many of Howdens' strategic strengths and giving comfort that recent issues are purely a function of a difficult market backdrop - clear outperformance versus underlying markets in all regions (with France showing a notable turnaround in 2H24) and a robustly expanding gross margin."