Travis Perkins (LSE:TPK) offers a margin-recovery story rather than a near‑term growth play, that's according to stockbroker Panmure Liberum which now rates the builder's merchant as a BUY, with a 740p price target, following Tuesday's first quarter update.
Analyst Adrian Kearsey pointed to operational improvements, a more assertive pricing stance, further procurement benefits, tighter overhead control and targeted efficiency measures, aimed at driving gross‑margin progression and restoring net margins. The broker flags the Q1 read‑throughs: group like‑for‑like revenue fell 1.7%, Merchanting LFL was down 2.3% but price and mix were positive at +1.0%, Toolstation UK grew LFL revenues by 2.6% while Toolstation Benelux declined 7.1%, and the group reported a -1.9% network change reflecting the 2025 disposal of Staircraft.
In the note, Kearsey says the next proof points are management’s interim update on Toolstation Benelux and a further overhead repositioning programme that he expects will include headcount reductions and reallocation to productive roles.
