Market's view on Travis Perkins
Published on April 2024
- The housing market has been weak for a while, leading to disappointing figures from Travis Perkins, despite the new finance director’s decisive actions to curtail losses in Toolstation Europe. The CEO stepping down was seen as a positive move by the board to address these issues.
- The CNBC interview with the company’s boss was criticized for focusing on history and brands rather than providing insights on future outlooks.
- A stock watcher noted that Travis Perkins is underestimated and holds unrealised value, despite being affected by fears of a recession which led to the stock being rated close to its decade low.
- Observations were made that Travis Perkins had suffered significantly post-Brexit vote, with losses amounting to 50% as UK’s prospects decreased and the sterling weakened. However, there was a good recovery post-COVID, though concerns about a potential housing crash similar to 2007/2008 were expressed.
- Liberum analysts suggested that the market is underestimating Travis Perkins, highlighting that despite a disappointing first half performance by Toolstation, the merchanting division showed improvement, especially with social housing refurbishment.
- Supply issues were mentioned as a significant concern not just for Travis Perkins but across the sector, with some items being quoted as delayed until 2023.
- Positive reflections were shared about the company’s return to focus, profitability, and the resumption of dividends, which indicated a shift back on track.
- The DIY market segment represented by brands like Wickes and Toolstation was viewed positively by some stock watchers, suggesting a strong belief in their long-term growth despite current challenges.