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(Sharecast News) - Deutsche Bank hiked its price target on Kier on Wednesday to 330p from 295p after the company said a day earlier that 2027 earnings were set to be at the top end of its expectations, and that it will not be making any more investments in new property developments as it focuses on its core businesses of infrastructure and construction.
The bank noted that Kier reported 10% earnings per share growth in FY26 and upgraded its medium-term targets to include a double-digit EPS compound annual growth rate.
"New Strategic Priorities are to focus on the core Infrastructure and Construction businesses, target more than £200m average net cash by FY29 while winding down Property and repaying the bond, and enhance quality of earnings," DB said.
"We view the 10x price-to-earnings multiple as highly attractive for a double-digit EPS CAGR opportunity, in addition to a 6% distribution yield."
Deutsche, which rates the shares at 'buy', said it estimates circa half the double-digit medium-term EPS CAGR can be delivered by holding the margin on the upgraded mid-single-digit revenue growth target, underpinned by growth across water, defence, energy and healthcare markets.
"We estimate the other half can be delivered by interest cost savings, with the 9% coupon £250m bond due Feb-29," it added.
At 1555 BST, the shares were up 11.7% at 287.60p.
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