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Investing.com - Morgan Stanley upgraded Kingspan Group PLC (LON:KSP) from Underweight to Overweight and raised its price target to EUR83.00 from EUR76.00.
The upgrade comes after two consecutive years of negative organic growth in 2023 and 2024, which coincided with a derating in the building materials company’s shares.
Morgan Stanley believes consensus estimates do not fairly reflect the mid-term upside potential for Kingspan, which experienced previous challenges from pricing pressures related to steel pass-through costs and lower volumes in certain segments.
The firm notes that while steel prices don’t indicate a rapid pickup in pricing, there appears to be little reason for additional pricing cuts, and volumes appear to have reached their bottom.
According to Morgan Stanley’s analysis, Kingspan’s order intake is up 5% to 6% on a like-for-like worldwide basis with a growing backlog, leading the firm to forecast 1% organic growth in fiscal year 2025, accelerating to 6% in fiscal year 2026.
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