Davy Morning Equity Briefing
May 28, 2026
Irish banks
CCyB remains unchanged
An unchanged countercyclical capital buffer (CCyB) is in line with our expectations at this point in the cycle. Most of the risks highlighted in the Financial Stability Review (FSR) directly relate to areas outside the banking system, albeit with potential second or third round impacts. Against this, the banking sector – with high capital ratios, low non-performing loans (NPLs) and much-improved profitability in recent years – is in a resilient starting position.
Breedon Group
Solid foundations, awaiting the turn
Breedon continues to execute well, building a more diversified and resilient business that has held up well versus other construction related, UK focused names (EBIT CAGR >17% since 2020). The stock, now at a three-year low, has typically signalled an attractive buying opportunity and we can see the appeal. For now though, a UK recovery that keeps slipping leaves us comfortable waiting for a clearer catalyst. We reiterate our ‘Neutral’ rating and set our price target at 355p per share.
IRES REIT
Positive AGM statement
IRES has issued a positive trading statement for Q1 2026 ahead of its AGM later today. Operating performance, as expected, continues to be very strong. The new rent regulations took effect from March 1st, contributing to a significant increase in residential investment – which is a positive backdrop for the market.
Package holidays
Integrated airlines versus asset-light platforms
UK holiday market is facing challenges as second order effects from the outbreak of the Middle East war continue to weigh on the sector. Consumer sentiment has shifted, with heightened uncertainty leading to delayed booking behaviour and increased sensitivity to flexibility and price. This has contributed to mix and margin worries across the market despite underlying travel intent remaining intact, particularly for summer holidays.
