Berenberg hikes target price on Marshalls after 'good start' to trading year

Analysts at Berenberg raised their target price on paving firm Marshalls from 740.0p to 790.0p on Monday, stating the group was "continuing to deliver".

Berenberg said Marshalls has had "a good start to the year", delivering 6% revenue growth year-on-year, with its domestic business being "particularly impressive" –delivering a 20% uptick on 2019 revenue growth, driven by strong repair, maintenance, and improvement trends.

As a result, the German bank upgraded its forecasts for the firm by about 6% and stated it thinks that there was still scope for further upgrades across the year.

However, trading on a 23.6x 2022 price-to-earnings ratio, the analysts said they struggled to find "significant upside" from the current share price, leading it maintain its 'hold' recommendation on the stock.

"As we expect the RMI market to be strong in 2021, we believe Marshalls' domestic business will remain robust as it continues to take market share. However, although we expect a recovery, we do not view the risk/reward as favourable for non-residential activity," said Berenberg.