Howden Joinery Group (HWDN)

Sector:

Retailers

Index:

FTSE 250

906.80p
   
  • Change Today:
      13.60p
  • 52 Week High: 908.60p
  • 52 Week Low: 613.00p
  • Currency: UK Pounds
  • Shares Issued: 548.67m
  • Volume: 1,446,996
  • Market Cap: £4,975.37m

Liberum downgrades Travis Perkins to 'hold'

By Michele Maatouk

Date: Wednesday 14 Dec 2022

LONDON (ShareCast) - (Sharecast News) - Liberum downgraded Travis Perkins to 'hold' from 'buy' on Wednesday, as it took "a more selective stance".
In a broader note on building materials and equipment hire, the broker said it sees outperformance more likely in shares of companies with clearer growth records or differentiators.

"We expect the housing market to soften on raised mortgage rates and lower confidence, but Travis has a good track record of cutting overheads if demand falls and it can reduce inventories and rein in capex to protect further its strong balance sheet," it said. "The shares look cheap, especially on a sum of the parts basis, but renewed performance will need rate expectations and inflation to peak."

Liberum said it sees little upside to its unchanged and conservative target price of 960p.

"We use a sum of the parts analysis, putting a relatively low multiple (8x) on Merchanting and valuing Toolstation using a discounted cash flow (less a 30% discount)," it said.

Liberum noted that Toolstation is unprofitable after European losses but fast growing and with a very strong franchise.

In the same note, Liberum said investors can take advantage of the selloff by buying the highest quality at good prices: Ashtead, Howden and Volution.

The broker hiked its price target on 'buy' rated Ashtead to 6,200p from 4,900p. Liberum said it sees almost 30% total shareholder return upside to the new target price, using ROCE/WACC.

"We expect its shares to continue re-rating as the market becomes more persuaded that the drivers of rental penetration are not transitory and that Sunbelt 3.0 will drive market share, by developing more clusters and boosting hire of speciality equipment," it said. "Ashtead has little residential exposure and derives 60% of demand outside construction. The growing pipeline of US mega-projects, many funded by government, should underpin construction related demand."

As far as Volution is concerned, which it rates at 'buy' with a 450p price target, Liberum noted the shares have de-rated in line with the UK building materials sector.

"This is harsh as it sustains margins and returns at high levels. Low operational and financial leverage protect the downside and there is upside from diverse geography, regulatory drivers and a proven ability to reinvest strong cash flows," it said.

"It has an eight-year record of 13% earnings per share compound annual growth rate since IPO, achieved without new shares or increasing leverage. End markets are likely to weaken in 2023, but regulatory drivers should be supportive. A very high-quality business available at a cheap price."

Liberum is the house broker for Volution.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

 

HWDN Market Data

Currency UK Pounds
Share Price 906.80p
Change Today 13.60p
% Change 1.52 %
52 Week High 908.60p
52 Week Low 613.00p
Volume 1,446,996
Shares Issued 548.67m
Market Cap £4,975.37m

HWDN Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
85.58% below the market average85.58% below the market average85.58% below the market average85.58% below the market average85.58% below the market average
94.74% below the sector average94.74% below the sector average94.74% below the sector average94.74% below the sector average94.74% below the sector average
Price Trend
85.60% above the market average85.60% above the market average85.60% above the market average85.60% above the market average85.60% above the market average
85.37% above the sector average85.37% above the sector average85.37% above the sector average85.37% above the sector average85.37% above the sector average
Income
64.44% below the market average64.44% below the market average64.44% below the market average64.44% below the market average64.44% below the market average
88.89% below the sector average88.89% below the sector average88.89% below the sector average88.89% below the sector average88.89% below the sector average
Growth
59.89% below the market average59.89% below the market average59.89% below the market average59.89% below the market average59.89% below the market average
10.00% above the sector average10.00% above the sector average10.00% above the sector average10.00% above the sector average10.00% above the sector average

What The Brokers Say

Strong Buy 4
Buy 6
Neutral 7
Sell 0
Strong Sell 0
Total 17
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

HWDN Dividends

  Latest Previous
  Final Interim
Ex-Div 11-Apr-24 12-Oct-23
Paid 24-May-24 17-Nov-23
Amount 16.20p 4.80p

Trades for 28-Mar-2024

Time Volume / Share Price
16:27 52,284 @ 901.92p
16:35 858,348 @ 906.80p
16:35 783 @ 906.80p
16:35 345 @ 906.80p
16:35 471 @ 906.80p

HWDN Key Personnel

CEO Andrew Livingston

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