Berenberg downgrades Tyman to 'hold'

Analysts at Berenberg downgraded construction firm Tyman from 'buy' to 'hold' and slashed their target price on the stock from 420.0p to 250.0p on Monday, stating now was "not the right time".

Berenberg said while Tyman had made "good progress" on its turnaround plan over the last few years, inflationary pressures and "an increasingly bearish end-market outlook" would now make it "difficult" for the group to outperform.

The German bank also noted that although Tyman trades at a 21% discount to peers, it said that this already appears to have narrowed versus history and, given likely earnings revisions, it believes there are currently limited catalysts to support a re-rating.

"We downgrade our recommendation to Hold with a new price target of 250p as we await signs of a bottoming out in US activity," said Berenberg, which also transferred coverage to analyst Lushanthan Mahendrarajah.

"Shares trade on 6.8x 2023 EV/EBIT. While optically cheap, we note that the discount to peers has already narrowed to 21% versus 25% historically. Given the risk of downwards earnings revisions, we see limited catalysts for a re-rating in the near term."

Reporting by Iain Gilbert at Sharecast.com