Canaccord raises target price on Howden Joinery

Analysts at Canaccord Genuity raised their target price on building supplies retailer Howden Joinery from 710.0p to 735.0p on Friday, stating the strength of the group's business model evident in its performance.

Canaccord said Howden had finished 2020 in "a strong position" and "much better than many had feared back in March", with the company benefitting from a strong repair, maintenance and improvement recovery in the second half.

However, Canaccord highlighted that it was "important to recognise" that the strength of the group's business model was what allowed it to take advantage of the bounce back in demand, with its in-stock model and good supply chain proving to be "very valuable" when demand came back strongly after the UK's first lockdown.

The Canadian bank also noted that the current trading year had seen "a solid start", with the analysts suspecting Howden will enjoy a good first half, and added that assuming trading holds up at normal levels in the second half, it sees upside risk to its forecasts.

"We increase our estimates and are encouraged by the confidence management is showing investing in growth and new depot openings in UK and France. Clearly trading risks remain, particularly around consumer confidence into H2, but the group looks to be in a very strong position from a micro perspective," said Canaccord, which reiterated its 'hold' rarting on the stock.