Broker Liberum has upgraded its target price for Balfour Beatty plc (LSE:BBY) from 400p to 475p a share.
Reiterating its ‘buy’ recommendation, Liberum said Balfour Beatty is more similar to an infrastructure fund than a UK construction company.
The read-across from infrastructure funds is supportive, and inflation sensitivity is a positive driver, the City broker added.
It suggested that the valuation of infrastructure assets should prove resilient in a recession and there is a strong pipeline of opportunities for the company.
Furthermore, as a developer and investor, Balfour Beatty can earn end-to-end returns by profiting from the construction of the assets, as well as the disposal of operational assets whose valuations are benefitting from the high levels of dry powder in private markets.