Grafton share price boosted
The final sentence in a five-paragraph development update statement issued yesterday stated: “Group profits in the first half of 2003 are expected to be slightly ahead of market forecasts.”
Davy Stockbroker’s analyst Florence O’Donoghue said the announcement indicates first-half trading was good and that development activity continues apace.
“We are forecasting pre- tax profits of €36.5m in the first half of the year, up 16% on the 31.6m recorded last year,” she told clients in a note yesterday.
Goodbody Stockbrokers analyst Robert Eason said that in addition to the Jackson Building Centres deal in February, which added 18 branches, it has completed three single branch acquisitions and opened seven greenfield sites in the year to date.
“We estimate this brings Grafton’s British branches to around 255, compared to 81 in 1998,” he said.
Grafton has also opened its sixth dry-mortar plant in Britain and plans to open five DIY stores in Ireland over the next few years.
The proposed openings will bring its Irish DIY store network to 19. Goodbody has Grafton as a buy with a €4.40 price target, made when the share was €3.87.
NCB Stockbrokers John Sheehan also has the shares as a buy recommendation and last week raised its price target from €4 to €4.50 per share.
Merrion Stockbrokers’s analyst John Mattimoe is also sweet on the share and has issued a note on Grafton reiterating its buy recommendation explaining Merrion’s confidence in the company’s capability of sustaining medium-term EPS growth of 15% per year was reinforced by a recent meeting with management.
“This strengthened our view a number of sources of upsides to forecasts exist and this morning’s trading statement reinforces the probability of forecast upgrades has increased, with the firm expecting results for the first half of the year to be slightly ahead of market expectations,” he said yesterday.
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