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Investing.com -- Travis Perkins (LON:TPK) stock jumped over 6% on Friday following the announcement of Gavin Slark’s appointment as CEO.
Conversely, shares of SIG plc plummeted by more than 11% on the same day following the announcement of Slark’s departure from his current role as their CEO.
RBC Capital Markets reported that Slark, highly regarded in the market for his value creation during his 11-year tenure at Grafton, will join Travis Perkins no later than 2026.
The brokerage flagged Slark’s prior experience as CEO of BSS Group between 2006 and its subsequent acquisition by Travis Perkins, suggesting he possesses a strong understanding of the Travis Perkins business.
RBC Capital Markets maintains a positive outlook on Travis Perkins, citing significant potential for internal improvements and market recovery.
The brokerage’s analysis indicate that the company’s valuation is supported by the market value of its freehold property and inventory. Their price target for Travis Perkins remains at GBp 1,050.
The analysts at RBC Capital Markets noted that while current trading conditions remain challenging, they believe the outlook for UK construction is gradually improving, particularly in the areas of housebuilding and infrastructure.
They also foresee substantial opportunity for Travis Perkins to improve its free cash flow and return on invested capital throughout the economic cycle.
Adding to this, analysts at Barclays (LON:BARC) anticipate that Gavin Slark’s appointment as the next CEO will be "taken well" by the market.
The brokerage noted that following Pete Redfern’s departure in March, CEO succession was considered key to a re-evaluation of the stock, and Slark’s experience and reputation from his time at Grafton are expected to aid in a recovery from near-low valuation levels.
Barclays believes this appointment is a "strong outcome" for Travis Perkins and, as previously indicated, anticipates a favorable market response, lending more credibility to discussions of recovery.