On Thursday, Deutsche Bank reaffirmed its Buy rating on Balfour Beatty (OTC:BAFYY) plc (BBY:LN) stock, a leading international infrastructure group, with a steady price target of £5.00.
The firm highlighted the company's profit growth in the first half of the year, which was primarily driven by increased activity in sectors such as energy, transport, and defence. This growth is expected to accelerate into the next year.
Balfour Beatty's adjusted earnings per share (EPS) saw a year-over-year increase of 18%, bolstered by the cumulative effects of a multi-year share buyback program and interest income from a growing net cash position.
Despite an operating loss in the first half reported by its Infrastructure Investments division due to one-time factors, Deutsche Bank pointed out that the segment's value is rooted in its assets, which have appreciated. The Directors' Valuation of this division rose by 5%.
The company's substantial order book, valued at £16.6 billion, was noted as a key factor in providing clear visibility of future workload. This strong pipeline is anticipated to continue to drive high levels of total shareholder return (TSR) as Balfour Beatty plays a crucial role in delivering necessary infrastructure investments within the UK.
Deutsche Bank also cited potential for additional gains from a rebound in the US commercial markets, which could further enhance Balfour Beatty's performance. The company's strategic focus and financial results position it favorably in the eyes of the analyst firm, which predicts a sustained positive trajectory for the infrastructure specialist.
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