DAVY VIEW

We are cutting our adjusted EPS forecasts by c.3% and c.2% for FY26 and FY27 respectively. The recent strategic review, which could result in a separation of Primark from the Food businesses, is a logical step that will bring greater clarity to the respective investment cases. However, it introduces an extended period of strategic uncertainty during which the equity story lacks a clear catalyst. With limited likelihood of near-term recovery in earnings momentum, we see little scope for a meaningful re-rating until the visibility improves. We therefore reiterate our ‘Neutral’ rating and £23 share price target.