Broker tips: Man Group, Travis Perkins

Numis has lifted its recommendation for investment manager Man Group from 'hold' to 'buy' and hiked its target price from 260.0p to 315.0p, saying that the company's decent short-term investment performance "cannot be ignored".

The broker updated its estimates for Man Group following its full-year results announced last week, noting that while there was little change to numbers after an in-line set of results, "most of the group's key strategies" had performed well so far in 2024, which has driven an upgrade to forecasts.

Numis acknowledged that the recent investment performance might not be sustained, but for now it sees decent upside.

"We do not think the share price has adequately captured the strength of the investment performance delivered so far this year and the favourable P&L implications. With more than 20% upside to our new target price [...] our recommendation moves to 'buy'," the broker said.

Analysts at Berenberg lowered their target price on builders' merchant and home improvement retailer Travis Perkins from 880.p to 800.0p on Thursday, stating times were "still tough" for the company.

Berenberg stated it struggles to get excited about Travis Perkins given the continued pressures it faces on both volumes and margins in 2024, and also said it thinks the business' elevated financial leverage "raises a few concerns".

However, it did note the group's proactivity in reducing costs and optimising cash flow through a series of differing initiatives that will leave it better positioned to benefit from the recovery when it comes.

"Considering these factors and the current valuation we keep our 'hold' rating but lower our price target to 800.0p as we cut 2024-26 EBITA forecasts by 10% following the FY 2023 results," said Berenberg.

The German bank added that Travis Perkins trades on 16x 2024 earnings per share, falling to 12x in 2025.