DAVY VIEW

We have upgraded our Hill & Smith forecasts following strong trading in the first four months of FY24. Our 4.4% adjusted EPS upgrade is driven by an increased Engineered Solutions margin. We leave our group organic revenue growth assumption unchanged at 5.6% for FY24E. We see further upside risk to profits from higher Galvanising margins, unchanged today, given the record US volumes seen so far in 2024. The shares have moved up to new all-time highs in reaction to the upgrade, and we see scope for further upgrades. We increase our 12-month price target 6% to 2,350p and reiterate our ‘Outperform’ rating.