Broker tips: Haleon, Tritax Big Box, XPS Pensions, Dunelm
By Iain Gilbert
Date: Wednesday 10 Sep 2025
(Sharecast News) - Haleon rallied on Wednesday as Goldman Sachs upgraded the shares to 'buy' from 'neutral' and lifted its price target on the stock to 440p from 415p, saying the current valuation offers an attractive entry point.
"Haleon shares have declined 9% since post its Capital Markets Day on May 1st which provides a buying opportunity, in our view, given that H2 25 headwinds from the US and FX/scope are reflected in consensus, while the attractive fundamentals remain intact," the bank said.
Goldman Sachs expects around 5% organic sales growth in FY26-28, as North America returns to growth and emerging markets see volume benefits from affordability actions.
GS also said the supply chain optimisation plans set out at Haleon's May capital markets day should deliver towards the top end of the range to FY27, underpinning around 8% organic underlying earnings growth while enabling A&P/R&D reinvestment. This will lead to 23.6% EBIT margins which remain below the circa 29% margin in Reckitt's former Health business, it said.
"We also believe enhanced profitability and working capital optimisation will drive a step up in underlying cash generation, despite increased capex to circa 4% of sales (from circa 3%), enabling enhanced cash returns and deleveraging," said Goldman. "We believe the fundamentals of the group remain intact, with good visibility into next year, driving 11% EPS growth in FY26/27e."
JPMorgan Cazenove reinstated coverage of Tritax Big Box on Wednesday following a period of restriction, with an 'overweight' rating and 180p price target, which implies 32% upside.
"We update for newsflow and results while restricted, including guidance that the company sees earnings growth potential of 50% to FY2030," the bank said. "This will come in the form of a hockey stick, with intense investment and disposals in the near term leading to strong EPS growth in the medium term."
JPM said that on its analysis, NAV growth could be stronger, with modest underlying capital growth boosted by development profit from datacentres.
"Taking a step back, listed UK property hasn't been able to catch a break over the last 12 months - down 17% with top-down drivers all going the 'wrong' way," it said. "What would help the sector - and we got a taster of its potential last week - is rate cuts, as UK names rose as much as 5% (from the lows) catalysed by US non-farm payroll data."
JPM considers the value in UK property to be evident, and said it expects that over the coming 12-18 months, the sector should re-rate higher on continued operational resilience and alleviating rate headwinds.
Analysts at Berenberg initiated coverage on consulting and administration firm XPS Pensions Group with a 'buy' rating and 440p target price on Wednesday, stating it was "a clear beneficiary" of an ever-evolving pensions environment and recent market volatility.
Berenberg highlighted that XPS has seen organic revenue growth rates of more than 17% per annum over FY23-25 and a doubling of FY22's adjusted underlying earnings performance.
While the German bank expects adjusted earnings per share growth to moderate to 3% in FY26 due to one-off factors, it also reckons the underlying recurring growth drivers in pensions to endure this, which, alongside further expansion into the adjacent insurance market, should mean that EPS rebounds to growth rates of 7-9% per year over FY27-28.
XPS recently entered the insurance consulting fee market, expanding its total addressable market to £4bn and extending its services' lives beyond the buyout stage.
"Considering this growth recovery and XPS's very high earnings quality, the recent pullback in the shares to a FY27 P/E of 15.2x, or EV/EBITDA of 9.6x provides an attractive entry point, in our view," said Berenberg.
A negative reaction to Dunelm's full-year results hasn't changed Canaccord Genuity's 'buy' rating, with the broker maintaining that the stock still offers "good value".
The Canadian broker said that, despite a challenging macro backdrop in the UK, results from the homeware retailer showed "further financial progress and market outperformance".
Canaccord pointed out that full-year sales and gross margins were already flagged in a July trading update, while pre-tax profit of £211m - up 2.7% year-on-year - was in line with consensus forecasts.
"Alongside the strong financial performance, the Group continues to make further operational progress as it looks to expand its share of the large and fragmented UK market for homewares and furniture to 10% over the medium term from 7.9% in FY25," Canaccord said.
Dunelm, meanwhile, was pleased with its performance so far this new financial year, meaning that Canaccord Genuity has left its £220.5m pre-tax profit forecast unchanged, representing 4.5% growth year-on-year.
"We continue to believe that Dunelm offers an attractive growth opportunity with significant share gain opportunities in under-penetrated categories coupled with further UK and Ireland store expansion potential," said Canaccord, which kept its 1,320p target price unchanged.
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