RBC slightly less 'cautious' on Travis Perkins, up target price on stock

(Sharecast News) - Analysts at RBC Capital Markets raised their target price on builders' merchant Travis Perkins from 1,000.0p to 1,250.0p on Wednesday, stating some improving trends and cost actions had made it slightly less cautious of the stock.
"The DIY trend has benefited through lockdown, the public are getting used to spending money on homes rather than travel and hospitality, and the stamp duty changes, the Green agenda and a commitment to infrastructure spending should all be helpful drivers," said RBC.

However, while RBC said short-term trading would be helped by the rebound from lockdowns and a strong DIY market, the Canadian bank also said it was cognisant of a weak macro and employment picture going into 2021 and, as a result, lowered its 2021-22 revenue and earnings forecasts.

"Clearly the outlook for the UK economy is not pretty from an employment and GDP perspective, especially as furloughs come off, and clearly this could impact the end consumer and RMI market," said the analysts.

RBC thinks Travis Perkins is "well placed" but, in the meantime, said it struggled to justify enough upside to be positive and reiterated its 'sector perform' rating on the stock.