Kingspan downgraded by UBS as shares trade ‘near record multiples’

Irish company has €1bn of mergers and acquisition ‘fire power’, investment bank says

Cavan-based building materials group Kingspan has been downgraded by UBS. Photograph: iStock

Cavan-based building materials group Kingspan has been downgraded by UBS. Photograph: iStock

 

Investment bank UBS has downgraded its view of Irish building materials group Kingspan suggesting increases in its share price are limited.

Despite a positive note referring to Kingspan as the “best in class in the building products sector”, analyst Gregor Kuglitsch downgraded the stock from “buy” to “neutral” as shares trade at “near record multiples”.

Mr Kuglitsch said the Cavan-based company still faces headwinds in the form of a slow-down in the UK market, however, he suggests that could be counteracted by improving momentum in continental Europe.

Structural growth

“While we believe that Kingspan offers a structural growth to growing product penetration and global expansion of its business, we think risk-reward is more balanced after a strong performance,” UBS said.

In terms of growth, UBS sees the company, which has a €6.52 billion market capitalisation, as having up to €1 billion of mergers and acquisition “fire power” over the course of the next year.

UBS has revised its 12-month price target for Kingspan to €38.50. The stock opened in Dublin on Tuesday morning at just more than €36 per share.