- Grafton Group Ut (CDI)
- 08 July 2026 10:28:40
Source: Sharecast
Berenberg said consensus earnings per share expectations had steadied in recent months, which it believes could help unlock upside for a stock trading at 11x FY27 earnings, compared with the 14x multiple it sees as fair.
Management's long‑term ambition for more than 10% annual EPS growth to 2030 sits ahead of both Berenberg's and consensus forecasts, which currently assume around 6% a year for FY26–28.
The German bank said the gap could be closed through further bolt‑on acquisitions, supported by Grafton's strong balance sheet. It estimates the group could deploy around £130m a year on M&A while its keeping net debt-to-underlying earnings ratio comfortably within the 1–2x target range.
Berenberg also sees scope for up to £330m of additional borrowing over the forecast period, giving the group optionality for investment and buybacks.
Grafton's geographic spread was highlighted as a source of resilience, with stronger markets such as Ireland and Spain helping offset UK weakness.
Looking ahead, Berenberg forecasts 5% annual revenue growth for FY26–28, including recent acquisitions, and expects adjusted EBIT to rise around 5% a year, with margins nudging up from 7.3% in FY25 to 7.4% in FY28.
Berenberg added that Grafton's shares currently trade at 12x FY26 EPS.
Reporting by Iain Gilbert at Sharecast.com
