DAVY VIEW

A second double-digit upgrade to current year earnings estimates in just over a month cements the view that the sharp first-half profit hit proved just a temporary disruption to Howdens. 2021 earnings forecasts have also been increased by over 10% and a rising net cash position paves the way for shareholder friendly actions early next year (restoration of the dividend and the share buyback programme). However, at over 20x our revised 2021 EPS forecast, we continue to regard the stock as fairly valued and retain our 'Neutral' recommendation.