LONDON (ShareCast) - (Sharecast News) - Analysts at Canaccord Genuity raised their target price on business services group Grafton from 835.0p to 930.0p on Friday following the firm's trading update from a day earlier.
Canaccord said Grafton's trading update confirmed that the group was on track to deliver "a very strong second half", with profits now expected to be "substantial higher" than previous guidance after having "clearly benefited" from strong demand in the RM&I and DIY market.

While the Canadian broker, which reiterated its 'buy' rating on the stock, acknowledged that UK traditional merchanting was "more subdued", similar to peers, but also noted that Grafton had some "good businesses" to exploit areas of the market that were still currently strong.

"It is now evident that the group has enjoyed an impressive recovery from the first severe lockdown and looks to be trading well through the current lockdown," said the analysts.

"We are increasingly confident that 2021 will be much closer to a more normal year in terms of sales and profits for the group but also understand the macro (including Brexit) and pandemic risks."

Canaccord added that management was "well positioned" to deal with the potential macro outcomes in 2021 and highlighted that momentum into 2021 currently looked "promising".

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