Berenberg lifted its price target on Howden Joinery to 1,075p from 1,000p on Wednesday, after incorporating the firm's recently completed acquisition of DIY Kitchens into its forecasts.
Source: Sharecast
Berenberg said the deal, announced earlier in June and now finalised, prompted a 4% to 9% uplift to underlying earnings estimates across the forecast period, though earnings per share rises by a more modest 1% to 2% due to higher interest costs and the issue of new shares.
DIY Kitchens gives Howden access to the non‑trade, direct‑to‑consumer kitchen market without cannibalising its core trade‑only model, said Berenberg, which also noted the acquisition broadens Howden's reach to digitally confident customers who prefer to self‑manage design and purchasing.
The German bank noted that DIY Kitchens generated £136m of revenue in FY25, growing more than 17% annually over five years, with £37m of adjusted EBIT and a 27% margin. The £390m enterprise value includes £292.5m in cash and £97.5m in new shares. Freehold property worth roughly £55m was also included in the deal.
Berenberg, which kept its 'buy' rating on the stock, said the firm's balance sheet remained a key strength, with Howden ending FY25 on £344m net cash and expected to retain around £70m in FY26, supported by free cash flow of more than £240m a year through the forecast period.
Howden's shares trade on 14.4x FY27 P/E and 8.0x EBITDA, Berenberg added.
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