Berenberg hikes target price on Victoria following 'resilient' H1 performance
By Iain Gilbert
Date: Monday 30 Nov 2020
(Sharecast News) - Analysts at Berenberg hiked their target price on construction outfit Victoria from 330.0p to 770.0p on Monday, citing the group's "resilient" first-half performance and its plans for future mergers and acquisitions.
In a period "heavily affected" by Covid-19 and associated lockdowns, Berenberg pointed out that Victoria's revenues were only down 2% year-on-year at £305.5m, while adjusted underlying earnings were down just 10% £52.4m.
However, despite the smaller than expected declines, Victoria also managed to "modestly" lower net debt from the level seen at the end of March.
In addition to the Koch investment announced in recent weeks and the expectation of further a return to mergers and acquisitions in 2021, the German bank believes Victoria to be "well set for a bright 2021".
"We update our forecasts for these H1 numbers; include the Koch preference investment; and also increase our price target to 770p from 330p to reflect the magnitude of this shift in financing capacity and future outlook," concluded the analysts, who also reiterated their 'buy' rating on the stock.
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