Analysts nearly doubled the target price to 70p from 36p following the Douglas & Gordon acquisition
Group PLC () was bumped up to ‘add’ from ‘hold’ by Peel Hunt as the London sales market is recovering.
The estate agent is currently seeing a significant uptick in the sales pipeline, which is around 30% ahead of the prior year.
READ: Foxtons higher as it cuts losses sharply in 2020
remains the purest way to play recovering transaction volumes in London, the broker reckons, while the Douglas & Gordon acquisition looks “a good fit”.
Analysts nearly doubled the target price to 70p from 36p and increased adjusted profit before tax estimates by £10mln to £4.5mln in 2021 and by £11.5mln to £9.5mln in 2022.
“Despite the upgrades, we believe Foxtons still has significant operational leverage in the business,” the broker commented.
“Flexing our assumptions to reflect a more rapid recovery in London’s housing market, transaction volumes in London and a return towards Foxtons’ previous level of branch efficiency implies an EPS of 13p, which would place the shares on a 4.6x multiple.”
Shares rose 1% to 64.3p on Thursday morning.
Read More: Foxtons Group PLC bumped up to ‘add’ by Peel Hunt as London sales market recovers