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Broker snap: UBS ups price target for Wolseley

With five months of the financial year still to run plumbers merchant Wolseley felt confident enough to raise its earnings guidance for the first time in three years, which suggests that gross margin pressure at US unit Ferguson is not accelerating, UBS believes.

The Swiss bank is looking for the unveiling of the new chief executive's strategic review on 22 march to provide a catalyst for the share price.

New boss Ian Meakins 'will highlight what is core, what will be slimmed down and what may be sold in due course,' UBS predicts. 'We also expect the group to set out medium term margin targets which are critical for the mid cycle.'

Responding to Wolseley's 10% increase in earnings guidance UBS has bumped up its price target from 1585p to 1723p. Its 'buy' recommendation remains unchanged.

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