Travis Perkins risks now fairly valued, says Barclays

Barclays upgraded builders' merchant Travis Perkins to 'equalweight' from 'underweight' on Tuesday, saying the risks are now fairly valued.

The bank pointed out that the shares are more than 50% off their peak and earnings have been revised down by around 45%.

"Although there remain uncertainties around economic activity in the UK and the company's own positioning and strategy, we think the valuation, which is close to trough levels, now reflects the risks."

Barclays said the key factor in coming months - aside from Brexit - will be the group's strategy update.

"Paradoxically, the positive surprise of third quarter trading being better than feared may make it more likely the revised strategy is less radical, which could underwhelm the market," it said.

Barclays has a 1,150p price target on Travis Perkins.

At 0940 BST, the shares were up 2.5% to 1,058.50p.