DAVY VIEW

We expected strong interim results from Breedon, and the company did not disappoint. On the back of that out-turn, we have upgraded our FY21 underlying EBIT forecasts by 14% to £130m. The group has expertly navigated the past 18 months and is now poised to capitalise on both organic and inorganic opportunities in its end-markets. Government spending is driving market growth, and a healthy balance sheet is facilitating increased capex, bolt-on opportunities and a progressive dividend. H1 was impressive and we think there is more to come. We reiterate our ‘Outperform’ stock rating and increase our price target to 120p.