Source: Sharecast
The German bank maintained its 'hold' rating on the stock, but lowered its underlying earnings forecasts for 2026-28 by an average of 15% after Ibstock guided to full-year 2026 EBITDA in the mid-£40m range - around 20-25% below consensus estimates.
Berenberg said trading conditions remained challenging through the third quarter and into the fourth, noting that UK brick market volumes fell roughly 17% year-on-year in July and August, while revenues in the third quarter came in 22% below management's expectations.
The downgrade reflects weaker sales volumes and lower fixed-cost absorption after Ibstock cut production by about 20% from previous plans to align output with softer demand. While ongoing cost-cutting and cash-management measures should help offset some of the pressure, the broker said near-term trading headwinds continue to outweigh longer-term opportunities linked to government efforts to boost housebuilding.
Berenberg also flagged balance sheet concerns, forecasting pre-IFRS 16 net debt-to-EBITDA of 4.4x in 2026, above the company's 3.0x covenant limit. However, it noted management remained confident that strategic land assets could support debt reduction, with potential mitigation measures including land disposals, asset sales and further restructuring.
Looking further ahead, Berenberg said Ibstock could benefit from increased housing delivery and eventually generate attractive margins in its clay division, but added that near-term risks remain firmly in focus.
Jefferies upgraded British Gas owner Centrica to 'buy' from 'hold' on Tuesday and lifted its price target on the stock to 200p from 190p.
The bank said it forecasts earnings per share to grow at a 13% compound annual growth rate over 2026-2030, driven by 17% CAGR growth in visible EPS from retail and infrastructure.
"In our view, the market is overlooking the visibility and growth embedded in the business," it said. "Upside from Centrica Energy and new infrastructure projects provides additional optionality beyond our base case."