Galliford Try’s Revenue Surge Leads to Undervalued Classification

October 03, 2024 08:00 PM AEST | By Team Kalkine Media

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Galliford Try’s Revenue Surge Leads to Undervalued Classification — Image source: Shutterstock

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Highlights

Galliford Try Holdings PLC demonstrates strong operational performance, leading to increased revenue forecasts and positive analyst sentiment.
Shore Capital Markets has raised its pre-tax profit forecast and anticipates a 15% increase in earnings per share.
Analysts from Panmure Liberum project significant growth potential, with future earnings per share estimates significantly higher than current levels.

Overview

Galliford Try Holdings PLC {LSE: GFRD} has recently reported revenue figures that have exceeded expectations, prompting analysts to assess the company as currently undervalued within the market. Shore Capital Markets has revised its pre-tax profit forecast from £30.7 million to £34 million, reflecting a robust operational performance. This adjustment corresponds with a projected 15% increase in earnings per share (EPS) to 24.7p.

Analysts from Shore Capital have highlighted that Galliford Try shares remain undervalued, trading at a multiple of 10.9 times estimated EPS for June 2026. This assessment is underpinned by the company's positive momentum and outlook, leading them to assign a "buy" rating and a price target of 350p for the stock.

In a similar vein, Panmure Liberum has reaffirmed its optimistic stance on Galliford Try, maintaining a price projection of 415p. This forecast was supported by the company's fully diluted EPS, which exceeded previous estimates by 21%. The increase in EPS can be attributed to strong operational results coupled with a favourable tax rate, which has enhanced overall profitability.

While Panmure Liberum has retained its pre-tax profit estimates, it has increased its EPS forecasts for 2025 and 2026 by 3% and 5%, respectively, in light of the newly announced £10 million share buyback initiative. This move is anticipated to further enhance shareholder value and reflect confidence in the company's financial health.

The analysts at Panmure Liberum have identified substantial growth potential for Galliford Try, suggesting that EPS could potentially triple by 2030 compared to 2023 levels, with estimates ranging between 50p and 65p. Following this positive analysis, Galliford Try shares saw a 4% increase, closing at 312p on Thursday.

Overall, Galliford Try Holdings PLC is positioned for continued growth, driven by strong operational performance and strategic financial initiatives.

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