Future looking good6 Sep 2021 09:17
Costain is ‘extremely cheap’, says Liberum
Construction and engineering group Costain (COST) is ‘extremely cheap’ given its structural growth opportunities, says broker Liberum.
Analyst Joe Brent retained his ‘buy’ recommendation and target price of 80p on the stock, which closed down 3%, or 1.8p, at 58.6p on Friday.
Earnings per share increased 28% in the first half of the year and the business is ‘operating effectively’, said Brent, analysing the interim numbers.
‘The order book has fallen slightly at first half 2021, but there is a high level of tendering activity,’ he said.
‘Costain is well positioned to benefit from the golden age of infrastructure and Boris Johnson’s 10 point plan [for a green industrial revolution]. It is well set for revenue and margin progress and is extremely cheap on current year 2022 price/earnings of 6.2x.’