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RBC Capital reiterated its Outperform rating on Ibstock Plc. (IBST:LN) Thursday, maintaining a GBP2.10 price target despite cutting earnings estimates for the brick manufacturer.
The research firm reduced its adjusted EPS forecasts by 31% for fiscal year 2025 and 5% for both 2026 and 2027. RBC attributed the profit warning to Ibstock-specific issues, citing "optimistic prior guidance and technical challenges at multiple brick sites."
RBC characterized the company’s challenges as short-term problems, suggesting investors use the current share weakness as an entry point. The firm noted Ibstock remains "deep value," trading at approximately 8 times recovered price-to-earnings ratio compared to its long-term average of 12 times.
The research firm acknowledged investor confidence in Ibstock "has taken a hit" following the profit warning. Ibstock also trades over-the-counter in the U.S. (OTC:IBJHF).
RBC indicated competitor Forterra (NASDAQ:FRTA) may be better positioned in the near term, with "higher exposure to volume housebuilders and near-term earnings risk skewed to the upside."
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