Citi starts coverage of Wickes at 'buy'

Citi has initiated coverage on shares of Wickes with a ‘buy’ rating after its demerger from Travis Perkins.

The bank, which set a price target of 282p, said Wickes has been a strong outperformer within the retail home-improvement sector in the UK and currently benefits from a robust DIY demand backdrop.

"We are buyers of the stock as we see solid structural growth drivers over the medium term (we estimate 2023e earnings circa +17% above 2019) in the fragmented home improvement landscape and the group’s leading brand position with digitally-led growth focus should support higher cash returns to shareholders," it said.

Builders’ merchant Travis Perkins completed the demerger of DIY and home improvement retailer Wickes at the end of April.