Source: Sharecast
The Canadian bank said the earnings recovery was now "on firmer footing" and noted that second-quarter net flows had signalled a potential turning point, with I&RW net flows (ex-liquidity) turning positive and Advisor showing sustained momentum.
"Further, ii remains a reliable earnings driver, supported by resilient treasury income," RBC said. "So, although uncertainty persists - including competitive pressures and subdued equities investment performance - we forecast 7% per annum earnings growth over FY25-27.
With shares now trading in line with the five-year average, RBC said shares now appear to be fairly valued, stating it sees reduced scope for underperformance.
Barclays upgraded United Utilities on Wednesday, saying it sees "better prospects" for the water sector amid an improving outlook.
The bank said the Cunliffe Review should lead to a resilient, lower-risk sector and that capex will continue to rise with a focus shifting to water resilience, asset health and PFAS - a large family of synthetic chemicals used across a variety of applications due to their durability and resistance to heat, water, and oil.
Barclays also said that better performers should see returns ahead of requirement.
The bank upgraded United Utilities to 'overweight' from 'equalweight' and upped its price target to 1,535p from 1,280p, noting there was 35% upside to the PT.
"We believe UU to be an attractive value proposition," Barclays said. "We estimate the group is trading at a cheap 10.0% premium to March 2026 RAB. If UU were to remain at a 10% premium to RCV by 2030, it would deliver circa 11.5% IRR through to 2030."
Analysts at Berenberg raised their target price on construction and infrastructure products manufacturer Hill & Smith from 2,500p to 2,650p on Wednesday after the group reported "an encouraging set of H125 results" a week earlier.
Berenberg noted that H&S management had forecast full-year underlying earnings to be in line with consensus estimates, despite incremental FX headwinds given its US dollar exposure. Hill & Smith also announced a new £100m share buyback, along with a continued commitment to bolt-on mergers and acquisitions.
The German bank said Hill & Smith's key US engineered solutions division continued to show "good growth with good margins", particularly in its larger-platform composites and utilities businesses.
It also said its galvanising services arm was "progressing well", with good organic growth, while UK & India engineered solutions remained subdued, with the UK being "somewhat of a drag".
Berenberg, which has a 'buy' rating on the stock, highlighted that Hill & Smith shares currently trade on 15.4x FY26 price-to-earnings ratio, 9.3x EBITDA and 11.4x EBIT.
