We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Canaccord Genuity raises target price on Eurocell

Fri 03 September 2021 10:02 | A A A

No recommendation

No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.

(Sharecast News) - Analysts at Canaccord Genuity raised their target price on building supplies retailer Eurocell from 310.0p to 330.0p on Friday, citing recent strong trading and investments made into growth.

Canaccord said Eurocell had delivered "a stellar set of interim results", driven by "a strong market recovery and market share gains", with both of its divisions delivering an "impressive profit outcome" that was "significantly ahead" of 2019 comparatives.

The Canadian bank, which reiterated its 'buy' rating on the stock, highlighted that despite challenges relating to supply-side issues and inflationary pressures, Eurocell managed to do "a very good job" securing raw materials, servicing customers and passing on cost inflation.

Canaccord also pointed out that despite higher capex, including £1.0m for its new warehouse and £2.0m to expand extrusion capacity, the group ended the period with a "modest" net cash balance.

"Trading since the end of June has continued to be robust, with management increasingly confident that these good market conditions will continue for the foreseeable future, as the industry is operating at around full capacity and lead times grow," said Canaccord.

"We increase our underlying 2021E earnings estimates by close to +10% and expect a modest net cash position in 2022E. The strong trading conditions look set to continue into 2022 and the group continues to make good progress investing for growth with new branches, new products, account wins all likely set to support good top-line growth for the foreseeable future, with strong operational leverage as it benefits from recent investment in capacity."

    The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.


    More stockbroker tips from ShareCast

    Latest economy and stock market articles