Davy Morning Equity Briefing
Sep 30, 2026
Irish banks
Banks monthly – rate expectations
Money markets are pricing in four additional European Central Bank (ECB) rates rises over the next 12 months, with high levels of volatility since the Iranian/Middle Eastern conflict started. For now, we incorporate two further rate increases into our forecasts. While less exposed to higher rates than in the past, Irish banks will continue to benefit from this trend and we increase our forecasts accordingly. Upside to these forecasts remains from further rate increases and from asset and liability dynamics. We upgrade our price targets to €12.84 for AIB Group (AIBG) and €22.87 for Bank of Ireland (BIRG) and retain our ‘Outperform’ ratings.
CRH
Recent weakness provides attractive entry point
Headwinds from the US residential market and cost pressures are likely to impact CRH’s H2 results; however, the addition of Arcosa means we increase our FY27 adjusted EBITDA forecast by c.4%. The year-to-date weakness in share prices is unjustified by the modest downgrades to FY26; with FY27 shaping up well, the current share price represents a good entry level.
Greggs plc
Q3 update – ahead of expectations
Q3 trading was ahead of expectations, with store managed like-for-like (LFL) growth of +3.4% (Visible Alpha, H2-26: +2.7%), supported by menu innovation and more settled weather in August and September. Cost inflation expectations remain unchanged at c.2% on a LFL basis in 2026, albeit with signs of greater inflationary pressures in 2027. Management has announced plans to consolidate in-house manufacturing operations, with annual cash savings of c.£20m expected from c.FY28-FY29. Improved trading performance in recent months and continued strong cost control have led Greggs to expect a modestly improved outcome for FY26. At first look, we envisage c.mid-single-digit % upside to our FY26 adjusted profit before tax, while our FY27 estimates will remain unchanged.
Cairn Homes
Increased estimates and accelerated returns drive price target to 296c
We upgrade our Cairn Homes EPS forecasts by 0.8% in FY26 and by c.2% in the FY26-28 period on the back of upgraded guidance and accelerated shareholder returns. These changes, along with a higher level of returns expected, drive a 9% increase in our price target to 296c. We reiterate our ‘Outperform’ rating.
