Costain Group PLC (GB:COST)
LSE:COST
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Costain
(LSE:COST)
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Rating:78Outperform
Price Target:
230.00 p
▲(23.39% Upside)
Action:ReiteratedDate:03/12/26
The score is driven primarily by improved financial stability and earnings quality (higher margins, low leverage, solid cash conversion), supported by strong technical uptrend signals. Valuation is reasonable but not deeply compelling, and the key risk tempering the score is the multi-year revenue contraction, which could limit future growth if it persists.
Positive Factors
Balance-sheet strength
Very low leverage and rising equity after the turnaround provide durable financial flexibility. This reduces refinancing and covenant risk, supports bidding on large public programmes, and gives headroom to absorb delivery overruns or invest in capabilities over the next 2–6 months.
Negative Factors
Multi-year revenue decline
A prolonged top-line contraction erodes scale benefits and can cap future margin expansion. If revenue trends persist, it could limit reinvestment, reduce bidding competitiveness on large frameworks, and ultimately pressure returns and the durability of the recent turnaround.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strength
Very low leverage and rising equity after the turnaround provide durable financial flexibility. This reduces refinancing and covenant risk, supports bidding on large public programmes, and gives headroom to absorb delivery overruns or invest in capabilities over the next 2–6 months.
Read all positive factors
Costain (COST) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£496.86M
Dividend Yield1.88%
Average Volume (3M)1.07M
Price to Earnings (P/E)11.5
Beta (1Y)0.93
Revenue Growth-12.98%
EPS Growth5.51%
CountryUK
Employees3,095
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)0.09
Shares Outstanding266,556,800
10 Day Avg. Volume1,084,180
30 Day Avg. Volume1,072,824
Financial Highlights & Ratios
PEG Ratio0.42
Price to Book (P/B)1.66
Price to Sales (P/S)0.41
P/FCF Ratio8.59
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£206.67Price Target Upside10.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.15
Revenue Forecast (FY)£1.24B
Costain Business Overview & Revenue Model
Company Description
Costain Group PLC provides smart infrastructure solutions for the energy, water, transportation, and defense markets in the United Kingdom. The company operates through two segments, Transportation and Natural Resources. The Transportation segment...
How the Company Makes Money
Costain primarily makes money by winning and delivering contracts to design, manage, and deliver infrastructure projects and long-term programmes for government bodies, regulated utilities, and other large infrastructure owners/operators. Revenue ...
Costain Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
82
Very Positive
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.05B | 1.25B | 1.33B | 1.42B | 1.14B |
| Gross Profit | 112.70M | 103.30M | 103.50M | 82.20M | 39.10M |
| EBITDA | 60.00M | 52.60M | 50.90M | 47.20M | 4.60M |
| Net Income | 37.30M | 30.60M | 22.10M | 25.90M | -5.80M |
Balance Sheet | |||||
| Total Assets | 561.90M | 547.20M | 468.60M | 482.20M | 532.40M |
| Cash, Cash Equivalents and Short-Term Investments | 215.30M | 158.50M | 164.40M | 123.80M | 159.40M |
| Total Debt | 25.00M | 25.80M | 24.30M | 29.50M | 66.20M |
| Total Liabilities | 303.70M | 311.50M | 249.20M | 271.00M | 333.40M |
| Stockholders Equity | 258.20M | 235.70M | 219.40M | 211.20M | 199.00M |
Cash Flow | |||||
| Free Cash Flow | 49.90M | 37.20M | 55.60M | 13.60M | 27.30M |
| Operating Cash Flow | 51.30M | 42.70M | 55.70M | 14.10M | 29.50M |
| Investing Cash Flow | -2.80M | -9.00M | -100.00K | -1.30M | -2.20M |
| Financing Cash Flow | -30.10M | -25.60M | -15.00M | -48.40M | -18.80M |
Costain Technical Analysis
Positive
186.40
Price Trends
181.62
Positive
168.22
Positive
156.36
Positive
Market Momentum
1.37
Positive
50.72
Neutral
36.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:COST, the sentiment is Positive. The current price of 186.4 is below the 20-day moving average (MA) of 186.55, above the 50-day MA of 181.62, and above the 200-day MA of 156.36, indicating a neutral trend. The MACD of 1.37 indicates Positive momentum. The RSI at 50.72 is Neutral, neither overbought nor oversold. The STOCH value of 36.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:COST.
Costain Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | £1.36B | 8.23 | 23.46% | 3.08% | -1.17% | 12.31% | |
78 Outperform | £496.86M | 11.49 | 13.06% | 1.88% | -12.98% | 5.51% | |
73 Outperform | £1.98B | 12.50 | 24.53% | 2.49% | 6.93% | 21.50% | |
72 Outperform | £491.47M | 7.10 | 27.48% | 3.65% | 5.78% | -6.80% | |
71 Outperform | £3.64B | 13.49 | 16.34% | 1.80% | 9.97% | -15.46% | |
71 Outperform | £879.13M | 9.81 | 11.69% | 3.19% | 4.40% | 31.59% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
GB:COST
Costain
191.40
87.22
83.72%
GB:BBY
Balfour Beatty
776.00
325.96
72.43%
GB:GFRD
Galliford Try
511.00
168.55
49.22%
GB:KLR
Keller Group plc
1,980.00
604.31
43.93%
GB:KIE
Kier Group plc
206.50
80.78
64.25%
GB:MGNS
Morgan Sindall
4,280.00
1,035.42
31.91%
Costain Corporate Events
Business Operations and StrategyStock Buyback
Costain launches £20m share buyback after pension overhaul
Positive
Mar 10, 2026
Costain Group has launched an on-market share buyback of up to £20m, following a recent overhaul of its pension arrangements that removed constraints on shareholder distributions. The board says the programme is a value-enhancing use of surpl...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Costain boosts profits, cash and shareholder returns on record £7bn order book
Positive
Mar 10, 2026
Costain reported another year of profit growth despite lower revenue, with adjusted operating profit up 9.3% to £47.1m and margins improving to 4.5% as it exited lower-margin road contracts and benefited from strong performances in natural re...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Costain lifts profits and cash as record £7bn order book fuels shareholder payouts
Positive
Mar 10, 2026
Costain reported a strong full-year 2025 performance, with adjusted operating profit up 9.3% to £47.1m and margins rising to 4.5%, despite a 16.4% revenue decline to £1,045.7m as legacy road contracts completed and HS2 work was reschedul...
Executive/Board Changes
Costain chair Kate Rock takes senior independent role at Chemring
Positive
Mar 4, 2026
Costain Group PLC has announced that its Non-Executive Chair and Chair of the Nomination Committee, Kate Rock, has been appointed as an Independent Non-Executive Director at Chemring Group PLC, effective 1 April 2026. Upon joining the London-liste...
Business Operations and StrategyDelistings and Listing ChangesFinancial Disclosures
Costain Reclaims FTSE 250 Spot After Two-Decade Absence
Positive
Mar 2, 2026
Costain Group has rejoined the FTSE 250 index for the first time in more than two decades, reflecting sustained improvement in its financial performance. The company cites increased profitability, positive cash generation and a growing pipeline of...
Business Operations and StrategyExecutive/Board Changes
Costain discloses external board moves of non-executive director Fiona MacAulay
Neutral
Feb 24, 2026
Costain has announced board changes involving non-executive director Fiona MacAulay, who also serves as chair of its remuneration committee and sits on its audit, risk and nomination committees. MacAulay has retired from the board of defence techn...
Business Operations and StrategyFinancial Disclosures
Costain schedules investor Q&A on 2025 full-year results
Neutral
Feb 9, 2026
Costain Group has scheduled an investor QA session to discuss its full-year 2025 results, to be hosted by chief executive Alex Vaughan and chief financial officer Helen Willis via the Investor Meet Company platform on 11 March 2026. The event, ope...
Business Operations and Strategy
Costain wins £100m contract for new M5 junction serving UK EV gigafactory
Positive
Jan 27, 2026
Costain Group has secured a contract worth about £100m over five years to design and build a new M5 motorway junction, 22A, in Somerset, awarded through the Regional Delivery Partnership framework. The junction will provide access to the Grav...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Costain frees up capital for higher shareholder returns after pension deal and strong FY25 trading
Positive
Jan 26, 2026
Costain has reached a new agreement on its defined benefit pension scheme that removes a long‑standing dividend parity constraint and eliminates the need for further cash contributions until 2031, freeing up capital to enhance shareholder re...
Business Operations and StrategyFinancial Disclosures
Costain Sets Dates for 2025 Trading Update and Full-Year Results
Neutral
Dec 19, 2025
Costain Group has scheduled a trading update for the year ending 31 December 2025 to be released on 26 January 2026, with full-year results to follow on 10 March 2026. The timetable underlines the company’s efforts to provide timely visibili...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.