DAVY VIEW

2022 was a good year for Ibstock. Buoyed by the impact of successfully implemented selling price increases, earnings guidance for the year was raised on a number of occasions. This has continued as the group’s latest update signals another modest upgrade. However, as is alluded to in the statement, this year will be a real challenge given the group’s exposure to the expected decline in UK housing starts and a weaker economy in general. As such, the stock looks relatively inexpensive, but at this juncture there is considerable forecast risk and earnings sensitivity. To this end we are likely to trim current year estimates.