Source: Sharecast
Berenberg noted that since its FY24 results on 26 February, Morgan Sindall has issued three trading updates highlighting the "strong progress" it has made in various parts of its business.
Morgan Sindall's latest update came on 17 June, this time highlighting that group pre-tax profits were expected to be "significantly ahead" of previous estimates.
The German bank pointed out that Morgan Sindall management had confirmed that year-to-date trading has been "encouraging", driven by ongoing strong trading conditions in its key fit-out division, as well as by improved margins in its construction unit.
"This helped lift the shares to new record highs, although we continue to believe there is more growth to follow in time, given the various options the portfolio structure provides," said Berenberg. We increase our EPS by 11% in FY 2025 and 6% in FY 2026," said Berenberg.
Berenberg added that the stock currently trades at a 13.6x FY25 price-to-earnings ratio and 9.2x EBIT.
Reporting by Iain Gilbert at Sharecast.com