Morgan Stanley upgrades Balfour Beatty stock rating on growth momentum

Published 27/08/2025, 06:26
Morgan Stanley upgrades Balfour Beatty stock rating on growth momentum

Investing.com - Morgan Stanley has upgraded Balfour Beatty plc (LON:BBY) from Underweight to Equalweight and raised its price target to GBP6.40 from GBP5.68.

The upgrade comes as Morgan Stanley acknowledges a significant shift in the company’s growth trajectory after a decade of stagnation in its core UK and US construction businesses. The firm cited "hard evidence of US Building acceleration" and "green shoots in US Civils" as key factors supporting the rating change.

Morgan Stanley also pointed to "higher-for-longer mega-projects support in UK Construction" and noted that Gammon operations in Hong Kong are offsetting the completion of terminal work at Hong Kong International Airport. The firm highlighted that the company’s Support Services division is experiencing "turbo-charged growth" driven by transmission and distribution activities.

Based on revenue momentum shown in the first half of 2025 and recent order intake across multiple segments, Morgan Stanley has increased its revenue estimates for Balfour Beatty’s Construction segment by 10%, 11%, and 13% for 2025, 2026, and 2027, respectively.

The firm also raised its Support Services revenue projections by 3%, 4%, and 7% for the same period, reflecting confidence in the company’s framework contract wins and stronger top-line momentum extending into 2026 and beyond.

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