Broker Peel Hunt has upgraded Howden Joinery Group (LSE:HWDN) as it expects next month’s trading update will reveal recent trading has been being better than expected, with a mix of greater volumes and better prices.
Peel upped its recommendation to ‘buy’ from ‘add’ and the target price to 1,065p from 945p.
The broker's profit forecasts were also raised by 15% for the full year and 20% for next year, with profit before tax of £360mln this year, which is 15% over the City analyst consensus.
On the back of extra inflation and a stronger-for-longer renovation market, Peel Hunt’s revenue expectations have risen by 5%-6%.
The broker is optimistic about the market in 2022 too.
Consumer savings, the jump in property transactions from the stamp duty holiday and the bottleneck in kitchen fitter availability can help the industry as it recovers from the impact of Coronavirus.
The group is scheduled to release a trading update on 4 November.
As of Friday afternoon, the share price of Howden Joinery was £890.60, up 0.91% on the previous day’s close.