Broker tips: Hill & Smith, Rolls-Royce
By Iain Gilbert
Date: Monday 17 Aug 2026
(Sharecast News) - Analysts at Berenberg hiked their target price on Hill & Smith from 2,950p to 3,180p on Monday, citing upgraded earnings forecasts and continued momentum in the group's US operations.
Berenberg said Hill & Smith delivered a strong first half, with its strategic focus on the US market driving double‑digit organic growth across key divisions and offsetting anticipated weakness in the UK. Group revenues rose 8% to $606.7m, while underlying EBIT also increased 8% to $102.9m, keeping margins steady at 17%.
The German bank noted that robust demand in US end markets and contributions from recent acquisitions underpinned Hill & Smith's performance, prompting management to raise full‑year expectations.
Berenberg said Hill & Smith's US Engineered Solutions and Galvanizing Services divisions led the way, delivering 14% and 11% organic constant‑currency growth, respectively. Within US Engineered Solutions, Berenberg highlighted V&S Utilities and the Composites Group as the principal growth engines, each capable of sustaining 10% to 12% organic growth per year into the medium term given strong US infrastructure demand. Management has already flagged further investment to expand capacity.
Portfolio activity remained busy in the first half, noted Berenberg, with the acquisitions of Freeberg and Hentech strengthening the firm's exposure to higher‑growth areas such as data centres and power generation. Freeberg, acquired for $38.8m, was expected to benefit significantly from US data‑centre trends through FY26 and FY27. With FY26 pre‑IFRS 16 net debt/EBITDA at around 0.5x, Berenberg said Hill & Smith has ample funding capacity and a well‑developed M&A pipeline.
Berenberg, which kept its 'buy' rating on the stock, also moved its reporting currency to USD and increased underlying EBIT forecasts by around 3% across the period, supporting the new price target. It added that Hill & Smith currently trades on 20.6x FY26 earnings and 12.6x EBITDA.
Citi hiked its price target on Rolls-Royce on Monday to 1,647p from 1,101p as it "materially" upgraded its long-term profit and cash flow forecasts by 30% to 40% following "very strong" first-half results.
"However, recent share price appreciation leaves insufficient upside to upgrade to buy, and we maintain our neutral rating," the bank noted.
Citi said the forecast changes were driven by improvements across all divisions, but most significantly in Power Systems.
"While we also increase Civil Aerospace forecasts, we believe the record H1 Defence margins are not sustainable," it said. "Our sensitivity analysis indicates Power Systems is now the most influential driver of value, surpassing Civil Aerospace."
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