Liberum upgrades Morgan Sindall to 'buy'

Analysts at Liberum upgraded construction and regeneration firm Morgan Sindall from 'hold' to 'buy' on Wednesday following some detailed guidance from the group.

Liberum said MS' first-half results were "weak as expected" with a 57% decline in fully-diluted earnings per share and weakness across the board.

However, with management giving detailed guidance on the group's outlook, the analysts increase their 2020 EPS estimates by 29% despite an impending £9.3m furlough repayment. They did leave it unchanged in 2021 though given "macro uncertainty and high private-sector exposure".

Liberum also increased its 2020 average daily net cash estimate significantly from £23m to £110m and upgraded its target price on Morgan Sindall from 1,225p to 1,300p.

"Total liquidity is more than ample and, although Morgan Sindall is eligible for the CCFF, it has not needed to use the facility," said the analysts.