Barclays has downgraded Travis Perkins plc (LON:TPK) from an "overweight" to an "underweight" rating and reduced its price target to 463 pence, down from the previous 850 pence, indicating an implied downside of roughly 16% from current market levels. The broker attributes the downgrade to heightened margin pressure stemming from weaker UK housing demand, noting that the merchanting operating margin declined from 7.8% in 2023 to 3.3% in 2025 and that the terminal merchanting margin estimate has been cut to 3.4% from 6%.
Barclays' revised 2026 pre‑tax profit estimate for Travis Perkins is 6% below the current Bloomberg consensus. Despite the downgrade, the stock is trading at a price‑to‑earnings multiple of 22 times current‑year earnings, which is above the last three peaks of approximately 18‑20 times and above the long‑term average of 12 times. The new target price of 463 pence still reflects a current‑year PE multiple of 18 times.
The analysts highlighted that the next potential catalyst for Travis Perkins could be a risk to consensus earnings at its first‑half results scheduled for 4 August.
In the same coverage, Barclays retained its "overweight" rating on Howden Joinery plc, keeping the price target unchanged at 980 pence, citing market‑share gains and M&A‑driven growth. Conversely, the broker lowered Breedon Group plc's price target to 380 pence from 450 pence after increasing its weighted average cost of capital (WACC) assumption to 8.9% from 8.3%.