Bank of America just raised its EUR/USD forecast
Investing.com - Deutsche Bank (ETR:DBKGn) raised its price target on Costain Group PLC (LON:COST) to GBP1.50 from GBP1.15 on Thursday, while maintaining a Hold rating on the infrastructure solutions company.
The bank’s decision follows Costain’s interim results, which aligned with expectations at the EBIT (earnings before interest and tax) level despite showing a significant decrease in revenues. The revenue decline was offset by stronger margins, particularly due to end-of-contract gains in the Water segment.
Deutsche Bank estimates these Water segment contract gains will not recur, creating approximately a 15-20% underlying EBIT headwind for the company heading into fiscal year 2026. As a result, the bank maintained its FY25 EBIT forecast but decreased projections for FY26 and FY27.
At the earnings per share level, Deutsche Bank increased its FY25 EPS estimate by 3%, reflecting the impact of Costain’s share buyback program. However, the bank reduced its FY26 and FY27 EPS forecasts by 6% each.
The price target increase to GBP1.50 comes despite the reduced forward earnings estimates, with Deutsche Bank citing strong share price performance across Costain’s peer group as justification for bringing its valuation approach in line with industry peers.
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