Berenberg put a dent in Marshalls PLC (LON:MSLH) share price on Tuesday after downgrading its rating for the paving group to ‘hold’ from ‘buy’ on valuation grounds.
The German bank, however, raised its target price for the FTSE 250-listed group to 620p, up from 580p, with the shares currently trading at 590p, down 1.2% on Monday’s close.
READ: Marshalls defies Beast from the East to deliver 2018 earnings growth
In a note to clients, Berenberg analysts said that with Marshalls’ shares up 44% since December - 28% in the year-to-date - and now trading on 20.4 times 2019 price/earnings (P/E), they believe the stock is now “fairly valued”.
The analysts noted that Marshalls reported a strong set of 2018 numbers, with revenue up and margins expanding by 80 basis points year-on-year.
They pointed out that although they continue to expect Marshalls’ revenue growth to outperform the market, with margins and returns also improving, they would await a better entry opportunity to buy the stock.