Deutsche Bank is a bit more bullish on British builders, with analyst Jonathan Coubrough lifting targets on a handful of London-listed construction names.
Coubrough, in a note, says the revisions reflect an improving risk environment for UK construction and infrastructure contractors driven by structural changes to public-sector procurement.
The analyst argues that the last ten years have reshaped how the public sector buys major projects and highlights four drivers of lower delivery risk: a shift to collaborative cost models, frameworks becoming the default route to market, earlier contractor involvement, and greater weight on non-financial criteria in bids.
He pins a sector re-rating on those procurement reforms, saying they should reduce price-only competition and support steadier delivery and margins for the contractor cohort.
The upgrades include:
- Balfour Beatty target raised to 990p from 850p
- Kier Group to 295p from 260p
- Morgan Sindall to 5,700p from 5,500p
- Costain Group to 200p from 180p
- Keller Group to 2,400p from 2,200p.
DB repeated Buy ratings for Balfour Beatty, Kier and Morgan Sindall, and rate Costain and Keller as 'Holds'.
