Builders merchant Travis Perkins plc (LON:TPK) is fixing its leaky plumbing, says broker Liberum, which rates shares a 'buy'.
In the recent third quarter numbers, the hit the group took in the plumbing and heating division should not overshadow a decent performance in the three other divisions, where growth accelerated and profits are on track, highlighted analyst Charlie Campbell.
Last week, the Wickes owner said sales in three months to end September rose by 3.4% as consumer sales jumped by 9.1% or by 6.8% like-for-like.
It also revealed it would close 30 UK branches and shed 600 staff.
Travis Perkins showed excellent cost discipline in the last downturn and this has started again, said Campbell.
"The outlook is uncertain, but we see the group continuing to gain share through its own initiatives, which should also boost profits."
Liberum lowers the target to 1650p for the shares from 1825p and has cut pre-tax profit estimates by 4% in 2016 and 10% in 2017, but still sees over 20% upside.
Credit Suisse also today repeats an 'outperform' on the shares and targets 1925p down from 1950p.
Shares are currently changing hands at 1, 368p.