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(Sharecast News) - Analysts at Berenberg hiked their target price for Balfour Beatty from 870p to 1,070p on Thursday, citing a materially stronger balancesheet position and upgraded earnings expectations following a robust firsthalf performance.
Berenberg kept its positive stance on the Balfour Beatty's core earningsbased businesses, applying a higher 11.2x FY26 EBIT multiple after what it called "good delivery".
Balfour Beatty posted a notably strong H1 on Wednesday, with profits from earningsbased businesses up 42% to £153m. Construction services revenue rose 8% to £4.54bn, while underlying profit from operations jumped 40% to £87m, lifting margins to 1.9% from 1.5%. UK construction revenue was flat at £1.57bn, while US construction revenue surged 19% to £2.48bn, swinging from an £11m loss to a £22m profit - something Berenberg said was central to the firm's stepup in performance.
Support services also impressed, with revenue up 10% to £727m and profit rising 43% to £66m, expanding margins to 9.1%. Management upgraded fullyear guidance for earningsbased businesses to low doubledigit growth, ahead of its previous high singledigit outlook.
Berenberg said Balfour Beatty was now at an "interesting strategic juncture", highlighting three areas - the potential to scale US operations further, the strengthened average netcash position, and opportunities to unlock more value from its investment portfolio over time.
The German bank noted that Balfour Beatty shares traded on 17.9x FY26 price-to-earnings ratio, 7.1x EBITDA and 8.9x EBIT, and said its upgraded price target reflected both improved fundamentals and clearer mediumterm growth pathways.
Reporting by Iain Gilbert at Sharecast.com
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