Davy Morning Equity Briefing
Sep 17, 2025
Hill & Smith
Model update
We have revisited our Hill & Smith forecasts. We make minor adjustments that primarily reflect US dollar weakness and nudge our EPS forecasts lower by 1% each year. Despite macro concerns, we expect continued positive underlying performance and this will be supported by share buybacks.
Ingredients
Updating dsm-firmenich model as vitamin prices decline; previewing Givaudan Q3
We have updated our dsm-firmenich (DSFIR) model to reflect the recent decline in vitamin markets, which in part drives a 2-2.5% cut to EBITDA forecasts for FY25 and FY26. We lower our DSFIR price target to €107 (from €115). For Givaudan, which reports Q3 results on October 14th, we leave our forecasts unchanged while noting the hurdle of prior year comps.
Barratt Redrow plc
FY25 ahead; FY26 caution on volumes
FY25 results are marginally better than market expectations, with synergies the main driving factor. Synergy will continue to be a benefit in FY26, but caution has been introduced on this year’s volume guidance as nervousness increases in advance of the UK Budget in November.
UK economy
UK inflation meets consensus in August
Headline UK inflation was unchanged in August, remaining at a year-on-year (yoy) increase of 3.8% and increasing in month-on-month (mom) terms by 0.3%. While core and services inflation eased slightly below consensus, they remain high and we do not expect the Bank of England will be in a position to further ease policy this year until there is a clear sign that disinflation has resumed. Elsewhere, November’s Budget looks set to be very challenging for Labour, in part due to a lower expected productivity forecast by the Office for Budget Responsibility (OBR).
