Broker tips: Tyman, Ashtead
Analysts at Liberum raised their target price on door and window components manufacturer Tyman from 425.0p to 530.0p on Wednesday after last week's "very strong trading update" from the group.
Liberum hiked its earnings per share estimates by 11-12% on news that the year has started "very strongly" for Tyman, with like-for-like growth of around 14% versus 2019.
The investment bank stated Tyman management had stabilised the business and it was now benefitting from the "strength of its end markets", with a particularly solid performance from the US residential market as both the new build and repair, maintenance and improvement metrics experienced "excellent" activity levels.
While Liberum noted there was "clearly a risk" that as restrictions end and competing alternatives for expenditure open up that appetite for moving or improving starts to wane. It expects that activity will "hold up well" as housebuilding remains "quite subdued" by historic standards.
Analysts at JP Morgan hiked their target price and reiterated their 'overweight' recommendation for shares of Ashtead in the wake of the equipment rental company's most recent Capital Markets Day.
In particular, they highlighted to clients what they said was the company's potential for sustainable and out-sized growth.
Their new estimates for the full 2021 financial year incorporated the faster than expected pick up in activity earlier in the year, management's own upgraded guidance and the outer-year upside for the company's Sunbelt 30 strategy.
All told, they bumped up their earnings per share estimates for Ashtead in financial years 2021-23 by 3%, 5% and 8%, respectively, and their year-end 2021 target price for the firm from 4,300.0p to 5,050.0p.
"The stock has been a stellar performer, but the investment case remains similarly straightforward and attractive to us; sustainable out-sized growth, strong cash generation and investor-friendly capital allocation framework."