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May 11 2021, 06:30 IST/BST
Our latest revision (an upgrade of 20%) leaves Grafton earnings estimates for 2021 29% above the start of year position. Even still, we prudently assume a slowdown from H2 after what will have been an extraordinary year to end-June. Alongside the impressive operational dynamism, there is the catalyst from the strategic review underway of the group’s traditional merchanting operations in Great Britain. A sale would probably increase net cash (ex-leases) to over £600m, which is around 20% of the current equity value. We believe the stock can continue to push on with valuation metrics, suggesting £14 is a credible aspiration.