Jefferies on Tuesday moved Kingspan from a hold rating to a buy and raised its price target to €140 from €103.90. The broker's updated model forecasts 2027 trading profit of €1.50 billion, which it says is 12.5% above the Visible Alpha consensus average of €1.33 billion. Jefferies attributes the upside to expanding activity at Kingspan's smaller, data-centre-focused Advnsys division and the group's recently announced acquisition of BMC.
The new price objective represents an implied upside of 38% from Kingspan's prior closing price of €101.17, according to Jefferies' calculations.
Beyond trading profit, Jefferies' 2027 projections exceed consensus across several key metrics. The broker forecasts 2027 sales of €12.35 billion, 7.7% higher than the consensus average of €11.47 billion, and earnings per share of 566.9 cents, 8.2% above the consensus average of 523.9 cents. Jefferies' 2027 trading profit margin estimate stands at 12.1%, compared with a consensus average of 11.6%, a gap of 51 basis points.
Jefferies noted that market consensus has not yet fully incorporated recent developments. The broker said the roll-forward of a stronger organic profile means its estimates move further ahead of consensus from 2028 onwards.
For 2026, the broker's forecasts align more closely with consensus. Jefferies projects 2026 sales at 1% above the consensus average, trading profit 0.2% above, and EPS 0.8% above the consensus figures.
Jefferies expects Kingspan to deliver an EBITDA compound annual growth rate of about 20% through 2028, substantially outpacing a sector average of roughly 5%. The broker said this rapid growth is mainly being driven by Advnsys, and it pointed to the second quarter of 2026 as a turning point that provided confidence in the division's medium-term organic growth potential. The purchase of BMC is expected to further enhance Advnsys' growth trajectory and margin profile.
In its revised planning, Jefferies said Kingspan now assumes Advnsys will meet a 2030 profit target, a target originally set during the division's now-withdrawn IPO process, by 2028. Under that scenario, Advnsys' contribution to group EBITA would approach almost half by 2030, rising from about 19% in 2025.
Jefferies also addressed leverage. It expects Kingspan's net debt to EBITDA to approach the group's target leverage ceiling of roughly 2x by the end of 2026 as a result of the BMC acquisition. However, the broker said robust cash generation should enable deleveraging to about 1x by the end of 2027. Jefferies suggested this improved balance sheet trajectory could provide the company with the capacity to pursue an acquisition larger than BMC.
On valuation, Jefferies said Kingspan trades at 11.6 times 2027 forecast EV/EBITDA, placing it in the mid-range of construction sector peers and below its three-year average of around 12.8 times and five-year average of around 13.7 times. The broker added that, as Advnsys and data-centre exposure grow within Kingspan's business mix, market participants may increasingly evaluate the group's valuation relative to European-listed data-centre companies trading in the 15 to 20 times range and U.S.-listed peers trading above 20 times.
Context and implications
Jefferies' upgrade reflects a reassessment of Kingspan's medium-term earnings power underpinned by a targeted division that serves data-centre demand and an acquisition that expands scale and margins in that part of the business. The broker's forecast divergence from consensus becomes more pronounced beyond 2027, driven by the expectation that Advnsys will quickly accelerate its contribution to group profitability.
What remains clear from Jefferies' update
- Jefferies raised the price target to €140 and upgraded the rating to buy.
- 2027 trading profit is forecast at €1.50 billion, above Visible Alpha consensus.
- Advnsys and the BMC acquisition are cited as the principal growth and margin drivers.