DAVY VIEW

The Grafton share price is around 25% off peak. Yet earnings estimates continue to be revised upwards as we upgrade our 2022 trading profit forecast by 4%. Grafton also sits on net cash (ex-leases) of almost £600m, which is over 20% of the current equity value of the group. While patience is needed, we remain confident that it will use the proceeds to shareholders’ benefit. However, this is arguably not what Grafton’s rating suggests, and we believe the stock offers excellent value at current levels.