Morgan Stanley analyst Annelies Vermeulen has maintained their neutral stance on TPK stock, giving a Hold rating on October 1.
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Annelies Vermeulen’s rating is based on a combination of factors that reflect Travis Perkins’ current market position and financial performance. The company reported a modest revenue growth of 0.3% in the third quarter, with a like-for-like increase of 1.8%, indicating a return to growth after a challenging period. This growth was primarily driven by the Merchanting segment, which saw a volume increase of 2.5%, although pricing was slightly down by 0.8%.
Despite these positive signs, the competitive market environment has necessitated investments in pricing and promotions, which could impact profitability. The company’s guidance for the fiscal year 2025 remains unchanged, but there is an expectation of a slight decrease in consensus operating profit due to lower pricing in the Merchanting segment. Overall, while the company is making progress in cash generation and maintaining discipline in overheads and capital allocation, the current market conditions and pricing strategies suggest a cautious outlook, justifying the Hold rating.
In another report released on October 1, Jefferies also reiterated a Hold rating on the stock with a p605.00 price target.