Analysts at Berenberg hiked their target price on construction firm Morgan Sindall from 5,400p to 5,800p on Friday in order to reflect another strong performance from the group's fit out division.
Source: Sharecast
Morgan Sindall released a trading update on Thursday that indicated it anticipates FY25 results, due on 25 February, to be in line with current market expectations, though given progress in its key fit out division, FY26 was now expected to be significantly ahead of previous expectations.
"This is yet another very strong update from the team at Morgan Sindall, again reflecting the strength of the Fit Out performance, which continues to impress," said Berenberg, which has a 'buy' rating on the stock.
"We had previously forecast FY26 EBIT in Fit Out to be in the middle of the £80m-100m range, down from the exceptionally strong c£138m we forecast in FY25. As such, given the divisional guidance to be 'significantly above the top end of the mediumterm target', we increase divisional EBIT to £110m and lift FY26 group PBT by c8%."
The German bank added that Morgan Sindal currently trades at a 16.2x FY26 price-to-earnings ration, 9.4x EBITDA and 11.0x EBIT.
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