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The Expert View: L&G, Associated British Foods, Redrow
by Chris Marshall on Sep 19, 2013 at 05:01
Redrow's ‘remarkable progress’
Redrow (RDW.L) has made ‘remarkable’ progress in recent years, says Panmure Gordon analyst Mark Hughes, who raised his share target price after the housebuilder reported a 63% leap in full-year profits and reinstated a 1p dividend.
‘In our opinion the company will make further significant progress over the next three years,’ noted Hughes as he raised his target price to 236p from 222p alongside upgrades to his earnings forecasts.
‘The company has made significant progress this year with revenue growth and margin expansion. Given the current strength of the housing market, as well as the strength of the companies trading, we are upgrading our 2014E and 2015E forecasts.’
He said the company benefited from having an ‘excellent’ finance director, while he was comfortable with the higher balance sheet gearing Redrow has than its competitors ‘at this stage of the cycle’.
The shares, which rose 2.4% yesterday to 239p, are a ‘hold’ for Hughes.
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