Source: Sharecast
Berenberg said its buy thesis on the stock was predicated on its expectation of strong unit growth and supportive market conditions in the UK; a growing opportunity in Germany, which is still taking shape; and a healthy balance sheet, with scope for shareholder returns. "Our confidence in this has somewhat waned in recent months," it said.
"Germany progress has slower than we anticipated, and cost inflation across the business has persisted," it said. "While some relief may be on the cards from business rate increases, we forecast group profit before tax to decline year-on-year in both FY26 and FY27.
While Berenberg said this should still leave scope for the dividend per share to be held and a buyback, the latter will be smaller in FY27 than FY26, in its view.
Berenberg said it awaits more clarity at the full-year results in April, when management will outline an update to the five-year plan. For now, it said the risk/reward was finely balanced and that there was little upside to its unchanged price target of 2,900p.
In the same research note, Berenberg upgraded InterContinental Hotels to 'buy' from 'hold' and named it a top pick for 2026.
"We had sat on the sidelines on IHG as we expected uncertainties in the US to weigh on earnings; however, IHG demonstrated the resiliency of the model, with operating profit estimates growing versus the start of 2025 despite this," it said.
"As we look into 2026, we are more optimistic on the outlook. We expect US RevPAR growth to accelerate, we feel Greater China is reaching its floor and, with sustained growth in EMEAA, we expect an acceleration in RevPAR growth in FY26."
With net unit growth also expected to accelerate, fee margin expansion to continue and IHG continuing to buy back shares, Berenberg forecasts a 12% EPS CAGR over the coming years, which it said warrants its valuation. Berenberg has a 9,200p price target on IHG.
Analysts at RBC Capital Markets lowered their target price on natural stone and concrete products manufacturer Marshalls from 240p to 195p on Tuesday as they took "a more cautious view" on the group's full-year 2026 trading performance.
RBC Capital, which has a 'sector perform' rating on the stock, noted that Marshalls had met FY25 expectations, rounding off "a challenging year for the group".
However, in the absence of a market recovery in FY26, RBC Capital sees the risk of continued pricing pressure in Landscaping, which could offset cost savings to a greater extent than factored into consensus.
As a result, the Canadian bank trimmed its below consensus FY26/27 adjusted pre-tax profit estimates by roughly 8% on average, leading to the fall in its discounted cashflow-based price target.
"We expect FY26 consensus to settle at c.£50m PBT (previous: £52m), which would leave us c.7% below at £46m. We factor in c.£8m of cost savings on par with consensus, but are more cautious on revenue growth. We take a prudent view on 2026 for the broader sector amid recent UK construction data, low consumer confidence and weak exit rates," added RBC.
Over at Canaccord Genuity, analysts lowered their target price on software firm Bango from 244p to 212p on Tuesday following the group's full-year trading update.
Canaccord Genuity said Bango's FY25 trading update pointed to "continued strong growth in recurring revenues, opex and capex reductions", but also noted that it retealed a $1.1m foreign currency headwind for profits.
Annual recurring revenues increased 30% year-on-year to $18.2m and following another top three telco win in the fourth quarter, the Canadian bank noted that Bango now counts seven of the top eight US telcos as customers. Transactional revenues declined 8% year-on-year, but transactional gross profits increased 3%.
"Overall, FY25 was another important year in establishing a highly profitable transactional business and continuing to win and scale Digital Vending Machine ('DVM') revenues, with a strong pipeline of new opportunities heading into FY26," said Canaccord, which reiterated its 'buy' rating on the stock.
"We view FY26 as a pivotal year given the strong implied revenue and profit growth, swing to positive FCF, all of which we believe are not currently being priced in by the market."
