Grafton Group - Model update – another earnings upgrade of substance

Davy Research
/Read Important Disclosures

We are increasing our 2020 EPS forecast by 26% and next year’s estimate by 5%. The latter (56p) means the latest forecast is 24% higher than what was envisaged back in May. It is clear some of Graton’s leading banners – such as Selco and Woodie’s – are emerging from the pandemic with an enhanced proposition and competitive position. This is an endorsement of Grafton’s longer-term prospects as is the burgeoning net cash build. The stock has done well recently – up over 20% in the past month – but we see no reason why it cannot kick on beyond the 900p level.