Grafton (GFTU) AI Stock Analysis

• Market Cap: £1.73B
• Dividend Yield: 3.99%
• Average Volume (3M): 446.66K
• Price to Earnings (P/E): 13.3
• Beta (1Y): 1.10
• Revenue Growth: 5.75%
• EPS Growth: 5.86%
• Country: UK
• Employees: 10,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.35
• Shares Outstanding: 191,080,580
• 10 Day Avg. Volume: 275,061
• 30 Day Avg. Volume: 446,657
• PEG Ratio: 0.90
• Price to Book (P/B): 1.10
• Price to Sales (P/S): 0.72
• P/FCF Ratio: 7.83
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £1,141.67
• Price Target Upside: 26.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 0.74
• Revenue Forecast (FY): £2.60B

• Rating: 68 Neutral
• Price Target: 1,002.00 p ▲(10.71% Upside)
• Action: Downgraded Date: 03/07/26
• Date: Action: Downgraded 03/07/26

The score is driven primarily by solid underlying financial quality (strong cash conversion and a conservative balance sheet) and supportive valuation (moderate P/E with a ~4% yield). These positives are partly offset by weaker technicals (price below key moving averages and negative MACD) and guidance indicating a slow early-2026 trading environment with persistent cost inflation and regional softness.

Positive Factors

Cash generation & conversion

Sustained high free cash flow conversion and multi-year cash generation underpin durable financial flexibility. This funds organic CapEx, selective M&A, dividends and buybacks, reduces reliance on external funding and allows the group to weather cyclical construction volatility over the medium term.

Conservative balance sheet & returns

Low leverage and ROCE comfortably above estimated WACC indicate the group generates value while retaining headroom on the balance sheet. That combination supports disciplined capital allocation, resilience to downturns and capacity for targeted investments or bolt-on acquisitions without jeopardising financial stability.

Successful M&A & geographic expansion

Proven ability to integrate acquisitions and lift like-for-like sales in Iberia strengthens diversification and growth optionality. Execution on Salvador Escoda suggests scalable roll-out capability, reduces concentration risk and builds a platform for structural revenue growth across new geographies over coming years.

Negative Factors

Multi-year margin compression

A sustained decline in margins and returns versus prior years signals competitive or cost pressures that may be structural. Lower profitability reduces internal reinvestment capacity and returns to shareholders unless productivity, pricing power or cost base improvements are restored over the medium term.

Regional operating weakness

Concentrated underperformance in Northern Europe and subdued Great Britain volumes reflect structural demand divergence across markets. Prolonged regional weakness can depress group profitability, limit economies of scale and require ongoing investment to rebuild market share or reprice offerings in those geographies.

Persistent cost inflation & higher financing cost

Elevated operating-cost inflation and rising net finance costs compress operating leverage and reduce margin headroom. If selling-price inflation lags cost inflation, sustained margin pressure may persist, constraining cash available for reinvestment and shareholder returns until cost pass-through or productivity gains are secured.

Grafton Business Overview & Revenue Model

Company Description

Grafton Group plc engages in the distribution, retailing, and manufacturing businesses in Ireland, the Netherlands, Finland, and the United Kingdom. Its Distribution segment distributes building and plumbing materials to professional trades people engaged in residential repair, maintenance, and improvement projects, as well as in residential and other new build construction. This segment operates 302 branches primarily under the Selco, MacBlair, and Leyland SDM brands in the United Kingdom; the Chadwicks brand in the Republic of Ireland; the Isero and Polvo brands in the Netherlands; and the IKH brand in Finland. The company's Retailing segment engages in DIY and home improvement business that supplies a range of products, including paints, lighting products, homestyle products, housewares, bathroom products, and kitchens, as well as gardening and Christmas products. This segment operates 35 stores primarily under the Woodie's brand. Its Manufacturing segment manufactures dry mortar for residential and commercial construction projects; and plastics and wooden staircase. Grafton Group plc was founded in 1902 and is headquartered in Dublin, Ireland.

How the Company Makes Money

Grafton generates revenue primarily through the sale of building materials and related products. Its key revenue streams include the distribution of timber, plumbing and heating supplies, and other construction materials to both trade and retail customers. The company also benefits from its extensive branch network, which allows for localized service and inventory management. Additionally, Grafton may engage in strategic partnerships with suppliers and manufacturers to secure favorable pricing and exclusive product lines, further enhancing its revenue potential. Seasonal demand in the construction sector and ongoing investments in e-commerce capabilities also contribute to its earnings.

Grafton Financial Statement Overview

Summary

Overall financials are solid, led by strong cash generation (free cash flow up in 2025 and ~86% of net income) and a sound balance sheet with manageable leverage (debt-to-equity ~0.38). The key constraint is profitability: margins and returns have stepped down meaningfully from 2021–2022 levels, keeping the financial profile in the upper-mid range rather than top tier.

Income Statement

Revenue returned to growth in 2025 (up ~5.1% after a slight decline in 2024), but profitability has trended down from the 2021–2022 peak. Net margin is now ~5.4% (vs. ~9.8% in 2021), and EBIT/EBITDA margins have also compressed versus prior years, pointing to weaker pricing and/or cost pressure. Earnings improved modestly in 2025, but the multi-year margin decline keeps overall income-statement quality in the mid-range.

Balance Sheet

Leverage looks reasonable and stable for the sector, with debt-to-equity around ~0.38 in 2025 (improved vs. ~0.55 in 2020) and equity steadily building. Returns on equity are positive but have moderated to ~8.3% in 2025 from low-double-digits in 2021–2022, consistent with the margin compression seen in the income statement. Overall, the balance sheet appears sound with manageable debt, but profitability-driven returns are not as strong as they were a few years ago.

Cash Flow

Cash generation is a clear strength: free cash flow rose in 2025 (up ~12.1%) and has been consistently strong relative to earnings, with free cash flow running at ~86% of net income in 2025 (and similar levels in prior years). Operating cash flow and free cash flow are both solid in absolute terms, though cash flow has been somewhat choppy year-to-year (e.g., declines in 2021–2022 free cash flow growth). Overall cash conversion supports financial flexibility and shareholder returns.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.52B	2.28B	2.32B	2.30B	2.11B
Gross Profit	383.68M	845.89M	374.45M	868.65M	830.91M
EBITDA	313.36M	310.55M	333.39M	386.80M	371.06M
Net Income	136.57M	122.01M	148.72M	208.62M	206.84M
Balance Sheet
Total Assets	2.82B	2.75B	2.81B	2.99B	2.95B
Cash, Cash Equivalents and Short-Term Investments	495.76M	509.43M	583.94M	711.72M	844.66M
Total Debt	619.15M	641.10M	633.20M	702.80M	705.63M
Total Liabilities	1.17B	1.16B	1.15B	1.24B	1.23B
Stockholders Equity	1.65B	1.60B	1.66B	1.75B	1.72B
Cash Flow
Free Cash Flow	232.25M	199.97M	220.04M	159.50M	194.59M
Operating Cash Flow	269.23M	246.82M	272.82M	217.34M	239.03M
Investing Cash Flow	-8.19M	-37.10M	-255.44M	-70.58M	353.22M
Financing Cash Flow	-228.92M	-233.79M	-342.29M	-289.54M	-193.10M

Grafton Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 905.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GFTU, the sentiment is Negative. The current price of 905.1 is below the 20-day moving average (MA) of 954.71, below the 50-day MA of 947.86, and below the 200-day MA of 930.00, indicating a bearish trend. The MACD of -13.00 indicates Positive momentum. The RSI at 38.91 is Neutral, neither overbought nor oversold. The STOCH value of 21.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:GFTU.

Grafton Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RS1	74 Outperform	£3.05B	8.02	11.65%	3.58%	-2.44%	-6.43%
GFTU	68 Neutral	£1.73B	13.32	8.38%	3.99%	5.75%	5.86%
BRCK	67 Neutral	£140.46M	5.60	5.63%	6.70%	8.83%	27.20%
LTHP	64 Neutral	£210.84M	0.64	―	6.53%	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SHI	47 Neutral	£92.53M	-1.82	-37.89%	―	-2.08%	-9.83%

Grafton Corporate Events

Grafton Launches £25m Buyback With First 50,000 Share Purchase

Grafton Group plc has begun a £25 million share buyback programme, repurchasing 50,000 ordinary shares of €0.05 each on 5 March 2026 on the London Stock Exchange at a volume‑weighted average price of £9.5664. The shares, acquired through Goodbody Stockbrokers, will be cancelled, reducing the company’s share count and signalling management’s confidence in its capital position and long‑term value for shareholders.

This initial tranche, executed under the Market Abuse Regulation framework, marks the start of the latest capital return initiative announced the same day. By shrinking its equity base early in the programme, Grafton enhances earnings per share potential and tightens its free float, a move likely to be closely watched by investors in the building materials distribution sector.

The most recent analyst rating on (GB:GFTU) stock is a Buy with a £1175.00 price target. To see the full list of analyst forecasts on Grafton stock, see the GB:GFTU Stock Forecast page.

Grafton Group Launches £25m Share Buyback to Cut Share Capital

Grafton Group plc has launched a new share buyback programme, appointing Goodbody Stockbrokers UC as agent and Deutsche Bank AG as principal to repurchase ordinary shares worth up to £25 million. The purchases, which will be executed independently under pre-set parameters, are scheduled to run from 5 March 2026 until no later than 31 August 2026, subject to market conditions.

The buyback, with a maximum capacity of 15,611,936 shares to be acquired on the London Stock Exchange and then cancelled, is intended to reduce the company’s share capital. Conducted in line with UK and EU market abuse and regulatory requirements and existing shareholder authorities, the programme may support capital efficiency and shareholder value, although Grafton notes there is no guarantee it will be completed in full.

The most recent analyst rating on (GB:GFTU) stock is a Buy with a £11.50 price target. To see the full list of analyst forecasts on Grafton stock, see the GB:GFTU Stock Forecast page.

Grafton Delivers Profit Growth and Cash Returns Despite Tough Construction Markets

Grafton Group reported a solid 2025 performance despite weak construction markets in several regions, with revenue up 10.4% to £2.52bn and adjusted operating profit rising 7.1% to £190.2m, helped by the first full-year contribution from Spanish acquisition Salvador Escoda. Margin discipline lifted gross margin by 50 basis points, return on capital employed improved to 10.9%, net cash remained robust at £274m, and the group returned significant capital to shareholders while launching a new £25m buyback and lifting the dividend by 2%.

Operationally, the Island of Ireland and Iberia delivered strong growth, Great Britain achieved profit growth despite a soft repair and maintenance market, and Northern Europe remained challenging, though macro indicators are improving. Management expects continued strength in Ireland and Spain but only gradual, uncertain recovery in Great Britain and Northern Europe, and is relying on tight cost control, structural demand tailwinds, and a strong acquisition pipeline to support medium-term growth and enhance profitability as markets normalise.

The most recent analyst rating on (GB:GFTU) stock is a Buy with a £11.50 price target. To see the full list of analyst forecasts on Grafton stock, see the GB:GFTU Stock Forecast page.

Grafton Group Releases 2025 Annual Report and Sets Date for 2026 AGM

Grafton Group plc has published its 2025 Annual Report, which is now accessible on the company’s website and via the National Storage Mechanism for regulatory inspection. The Annual Report forms the core disclosure of the group’s recent performance and governance to investors and the wider market.

The company also confirmed that the Notice of its 2026 Annual General Meeting, scheduled for 15 May 2026, will be sent to shareholders later this month along with proxy forms. These steps formalize the upcoming governance cycle, giving shareholders time and tools to review company information and exercise their voting rights on key agenda items at the AGM.

The most recent analyst rating on (GB:GFTU) stock is a Buy with a £11.50 price target. To see the full list of analyst forecasts on Grafton stock, see the GB:GFTU Stock Forecast page.

Grafton Updates Share Capital and Voting Rights for Disclosure Purposes

Grafton Group plc has confirmed that as of 27 February 2026 it has 191,830,588 ordinary shares of €0.05 each in issue, of which 500,000 are held in treasury, leaving 191,330,588 voting rights in the market. The company stated that this voting-rights figure should be used by shareholders as the reference denominator when assessing whether they must disclose new or changed holdings under applicable EU transparency regulations.

The update clarifies the company’s capital and voting structure for investors, supporting compliance with disclosure rules and improving transparency in the market for Grafton’s shares. By quantifying both issued share capital and treasury holdings, the notice helps institutional and other significant shareholders monitor their thresholds for regulatory reporting obligations.

The most recent analyst rating on (GB:GFTU) stock is a Buy with a £11.50 price target. To see the full list of analyst forecasts on Grafton stock, see the GB:GFTU Stock Forecast page.

Grafton Updates Market on Total Voting Rights and Share Capital

Grafton Group plc has reported that as of 30 January 2026 it has 191,829,076 ordinary shares of €0.05 in issue, of which 500,000 are held in treasury, leaving a total of 191,329,076 voting rights. The updated share and voting-rights figure provides the market and existing shareholders with the official denominator to assess and disclose significant holdings or changes in their interests under EU transparency regulations, supporting ongoing compliance and clarity around the company’s ownership structure.

The most recent analyst rating on (GB:GFTU) stock is a Buy with a £11.50 price target. To see the full list of analyst forecasts on Grafton stock, see the GB:GFTU Stock Forecast page.

Grafton Holds 2025 Profits in Line as Iberia and Ireland Offset UK and Nordic Weakness

Grafton Group reported that trading for 2025 was in line with expectations, with full-year revenue rising 10.4% to £2.52 billion and adjusted operating profit anticipated to meet market forecasts, supported by its diversified portfolio and tight margin and cost management amid softening demand in some markets. The group has reorganised into four geographic operating segments—Island of Ireland, Great Britain, Northern Europe and Iberia—while highlighting robust growth in Ireland and especially Iberia, weaker conditions in Great Britain and Northern Europe, and the appointment of Mario Ballarín as Iberia CEO to drive regional expansion; management said the balance sheet and acquisition pipeline leave the company well-placed to capitalise when market conditions improve.

The most recent analyst rating on (GB:GFTU) stock is a Buy with a £1067.00 price target. To see the full list of analyst forecasts on Grafton stock, see the GB:GFTU Stock Forecast page.

Grafton Confirms Total Voting Rights at Year-End 2025

Grafton Group plc has confirmed that as of 31 December 2025 it has 191,828,474 ordinary shares of €0.05 each in issue, of which 500,000 are held in treasury and do not carry voting rights, leaving a total of 191,328,474 voting rights. The company stated that this voting-rights figure should be used by shareholders as the denominator when calculating whether they are required to disclose holdings or changes in their interests under applicable transparency regulations.

The most recent analyst rating on (GB:GFTU) stock is a Buy with a £1067.00 price target. To see the full list of analyst forecasts on Grafton stock, see the GB:GFTU Stock Forecast page.