Source: Sharecast
RBC Capital, which has a 'sector perform'rating on the stock, noted that Marshalls had met FY25 expectations, rounding off "a challenging year for the group".
However, in the absence of a market recovery in FY26, RBC Capital sees the risk of continued pricing pressure in Landscaping, which could offset cost savings to a greater extent than factored into consensus.
As a result, the Canadian bank trimmed its below consensus FY26/27 adjusted pre-tax profit estimates by roughly 8% on average, leading to the fall in its discounted cashflow-based price target.
"We expect FY26 consensus to settle at c.£50m PBT (previous: £52m), which would leave us c.7% below at £46m. We factor in c.£8m of cost savings on par with consensus, but are more cautious on revenue growth. We take a prudent view on 2026 for the broader sector amid recent UK construction data, low consumer confidence and weak exit rates," added RBC.
Reporting by Iain Gilbert at Sharecast.com