Broker tips: OXB, Bunzl, AB Foods, Kingfisher, Wickes
By Iain Gilbert
Date: Tuesday 26 Aug 2025
(Sharecast News) - Analysts at RBC Capital Markets hiked their target price on gene and cell therapy firm OXB from 800p to 930p on Tuesday following its recent oversubscribed £60m equity funding and revenue guidance reiteration.
RBC Capital Markets highlighted that OXB, formerly known as Oxford Biomedica, now sees "growing client demand, including visible near and medium-term opportunities across all clinical phases, including late-stage and commercial supply".
The Canadian bank said this necessitates capacity expansion earlier than previously anticipated, with OXB taking the opportunity to build out US commercial-scale capacity for viral vector manufacturing and associated fill-finish services. It also noted that OXB sees opportunities to improve the rest of its network, improve asset utilisation, and continue to innovate.
"Having largely derisked 2025, we increase our one-year price target to 930p, from 800p, which continues to be based on a 20x 2028E EBITDA multiple and a 25% pa discount rate - now with one fewer years of discount in light of improved visibility," said RBC, which reiterated its 'outperform' rating on the stock.
Other than adjusting for the new equity, increased capex and guided margin trajectory, RBC reckons the most interesting change in forecasts was related to the revenue guidance. For 2025, guidance for £160-170m revenue was unchanged, but for 2026, revenue was now expected to be £220-240m versus prior guidance of less than £220m.
"This isn't necessarily much of a change, but the £220m was originally presented as a 2026 target in April 2024, and was caveated by "at CER" - the USD/GBP exchange rate was around 1.25 at that point, and now sits around 1.35. Although the company has not disclosed the proportion of revenues denominated in USD, we assume it is meaningful in light of the biotech industry's US weighting. If it is around 50%, this implies a 5% revenue headwind since then, implying that the new guide is a 5% uplift at the lower end," said RBC, which added that the new range implied that OXB now has more certainty visibility.
Bunzl's share price was up 5% on Tuesday after a solid first-half report from the distribution company, with broker Shore Capital reiterating a 'buy' stance on the stock.
Results for the six months to 30 June were slightly below estimates, with a 0.8% increase in revenues to £5.75bn missing Shore Capital's forecast by around 1% or £60m. Underlying revenues were flat, while the EBIT margin fell 100 basis points over last year to 7.0%. However, "the problem areas in North America and higher costs in Europe are being addressed", said analyst Robin Speakman.
With the company set to resume its share buyback - "a sign of confidence", according to Speakman - Shore Capital maintained a positive view on the stock and kept its forecasts unchanged, with Bunzl's management guiding to a stronger second half.
"Bunzl's asset allocation commitment to create shareholder value remains unchanged, ensuring/leveraging financial strength. So, we expect to see the impact of the resilient business model delivering recovery through H2F, noting the free cash flow yield of still 7.1% for this year, rising to 9.2% for FY26F in our forecast model," the analyst said.
As for Bunzl's valuation, the stock is currently trading at an enterprise value-to-EBITDA multiple of 8.8, though Shore Capital's fair value estimate of 3,040p implies a 2026 EV/EBITDA of 9.9x.
Deutsche Bank downgraded its stance on Associated British Foods, Kingfisher and Wickes on Tuesday as it took a look at the UK retail sector.
"We are taking a more cautious view on the UK consumer," the bank said. "The end of 2024 and early 2025 are likely to have been the sweet spot with real wage growth set to slow and fear of unemployment set to build from here. Our Household Cash Flow model shows discretionary spending lagging spending power and, unless consumers reduce savings, there will be a 4ppt slowdown in discretionary spend to +3% in 2H from +7% in 1H.
DB said consumer confidence metrics remain subdued and its new "Fear Index" suggests things may be getting worse. Its analysts cut Primark owner AB Foods and Wickes to 'sell' from 'hold', while Kingfisher was downgraded to 'hold' from 'buy'.
The German bank also cut its price target on AB Foods to 2,130p from 2,220p, on Wickes to 195p from 205p and on Kingfisher to 280p from 320p.
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