Costain Group – expecting positive Interims on Thursday, mkt cap just £570m, with £171m net cash, making over £1m a week profit – shares are cheap!

Mark Watson-Mitchell - 10.08.2026

Ahead of the Costain Group (LON:COST), announcing its Interim Results this coming Thursday, 13^th August, some five brokers are calling its shares as a Buy, with one rating them as a Hold.

The analyst Target Prices range from 200p to 297p, with the average centred on 240.3p.

One of the broking firms has clearly stated that it expects that the group, which delivers predictable, best-in-class infrastructure solutions across the transport, water, energy and defence markets, will declare a positive update on Thursday.

In its First-Half year, overall its pipeline is strong, the group has achieved substantial order intake in Transportation, and particularly in the Water and Energy sectors.

“One important element of the group's strategy is to expand, diversify and balance its customer base, enhancing the scale and resilience of the business.

This has resulted in significant growth in the value of forward work with private and regulated customers in recent years.

The value of forward work with central government customers has remained stable.”

Impressively, the group has a forward work position of some £7bn.

Its shares are currently trading at around the 214.50p level, just 6p below the recent High, but some 90p higher than the Low scored last September.

On the basis of broker expectations, the £570m-capitalised Costain Group shares look to be a bargain, destined for trading in a much higher price range – 240p/260p in due course.

The Business

With over 160 years of history, the Costain Group, is a sustainable solution company focused on four key markets of the UK with long-term investment in infrastructure: transport, water, energy, and defence.

It operates through two segments: Natural Resources and Transportation.

Its sectors include road, rail, integrated transport, energy, water, and defence and nuclear energy.

Its road sector provides a full range of services to support investment across the road network, increasing capacity, cutting emissions and supporting the UK economic stability.

Its energy sector creates and delivers energy security for the UK with focus on energy transition, energy resilience, and energy connectivity.

The company is involved in research and development in its highways, integrated transport, aviation, energy, defence, water, and rail sectors.

It continues to be well-positioned in its various attractive markets.

The Equity

There are some 263.95m shares in issue.

The larger holders include Gresham House Asset Management Ltd. (Investment Management) (9.43%), BNP Paribas Financial Markets SNC (5.91%), J.O. Hambro Capital Management (5.04%), FIL Investment Advisors (UK) (4.76%), BlackRock Investment Management (UK) (3.09%), OP Asset Management (3.05%), Artemis Investment Management (1.99%), Société Générale Gestion (1.73%), Acadian Asset Management (1.72%), and Euroclear Bank SA (1.68%).

Broker’s Views

Some six firms follow the group closely, with five calling its shares out as a Buy, while the sixth suggests that they are a Hold.

The consensus average Target Price is 240.3p, with the Lowest call at 200p, dwarfed by the Highest at 297p.

Over at Cavendish Capital Markets, analyst Max Hayes considers that there is ongoing evidence of Costain’s revenue visibility and growth potential.

Hayes has issued a Buy note on the group, with a high 297p Target Price.

For the year to end-December 2026, he estimates that the group’s revenues will rise to £1,272.0m (£1,045.7m), with adjusted pre-tax profits of £53.0m (£53.6m), lifting earnings to 15.0p (14.7p) and increasing its dividend to 5.1p (4.2p) per share.

For 2027, he looks for £1,394.0m revenues, £59.6m profits, earnings of 17.3p and paying a 5.8p dividend.

Further growth is expected in 2028, to £1,467.6m sales, £64.3m profits, 18.7p earnings and a 6.3p dividend.

Analysts Joe Brent and Joe Walker, at Panmure Liberum, have a Buy note on the group, with a 245p a share Target Price.

“We expect a positive update on the 13th of August.

Given the growth, we assume a 67% weighting of EPS to H2.

Maintain BUY and 245p TP; a CY 27 P/E of 11.1x is too cheap given the growth on offer.”

For this 2026 year, they estimate £1,245m sales, £53.4m pre-tax profits, 15.4p of earnings and paying a 5.1p dividend per share.

The 2027 year could see £1,370m revenues, £62.9m profits, 18.6p earnings and a 6.2p dividend.

Leaping into 2028, the analysts reckon that the group could report £1,445m of sales, £66.8m profits, 19.7p earnings and pay a 6.6p per share dividend.

Over those three years the analysts see the group building up its net cash balances - £170.7m in 2026, £182.4m in 2027, then up to £207.2m by end-2028.

My View

Costain Group shares are a solid purchase at 214.50p, with early prospects of trading in the 240p/260p price range.

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Costain Water