Costain shares jump after Peel Hunt, Panmure raise target price
Shares in Costain jumped as much as 10 per cent in early London trade after raised price targets from analysts at both Peel Hunt and Panmure Liberum.
The London-listed construction company’s target price was upgraded to 150p from 135p by Peel Hunt and to 170p from 150p by Panmure Liberum.
The firm unveiled a £10m share buyback on Monday after its pension scheme was in surplus for a second consecutive year, causing scheme contributions to be suspended until July 2026.
Costain said trading was in line with expectations after new contract wins with the government’s Sizewell C nuclear energy plant and further work with Anglian Water to deliver an additional 260 kilometres of major strategic pipeline in the East of England.
“Costain is well positioned to benefit from the government’s emerging infrastructure plan, and strength in regulated markets like Water and Energy,” Panmure Liberum analyst Joe Brent said.
“There is a strong, high-quality forward work position. It is helped by recent nuclear wins, and further work with Anglian Water.”
‘A sector that is performing well’
“Costain is continuing to make operational and strategic progress, supporting a higher quality of earnings and visibility,” said Peel Hunt analyst Andrew Nussey.
“The shares have performed well in a sector that is performing well.
“Investors will likely welcome another buyback and the continued operational momentum. We expect an upbeat outlook statement in August.”
Costain shares have now risen by nearly a third since the start of the year, to give the firm a market cap of £380m.
Costain CEO Alex Vaughan said: “Over the past three years we have executed on our strategic plans, improved the quality and size of the group’s contract portfolio, delivered on our margin targets, significantly strengthened our net cash position and successfully refinanced our bank and bonding facilities, giving the group the financial strength and capability to support its future growth opportunities.
Last year the company moved its head office from Maidenhead to Canada’s ‘Can of Ham’ building.