Peel Hunt downgrades Biffa after results, cuts price target

Broker Peel Hunt downgraded its stance on shares of waste management company Biffa to ‘hold’ from ‘add’ on Thursday and cut the price target to 395p from 430p after the interim results.

Peel said the results were in line overall but the performance of Company Shop Group has disappointed.

"The big disappointment is the Company Shop, bought earlier this year for £88m, which is seeing reduced footfall, and the company is taking an impairment charge of £25m," Peel said.

"We make no change to our adjusted profit before tax expectations of £75.0/91.3/103.9m and earnings per share of 18.9/23.0/24.8p for FY22/23/24E," it said.

The broker argued that shares are now up with events, trading at 8.1x FY23E EV/EBITDA.