Costain Group - starting to edge higher ahead of its Trading Update on the 26th, shares 161.60p, brokers TP 215p

Mark Watson-Mitchell - 06.01.2026

I was interested to note the sudden move this afternoon in the shares of my favourite infrastructure specialist the Costain Group (LON:COST).

As I write they are trading at 161.60p, valuing the whole group at just £431m, having risen 4p on the day.

Now that may not sound like anything special in price moves, but they have not been this high since August.

After the massive share buyback programme finished in the summer, with the shares hitting 172.40p at their best, the subsequent fall back in price saw them ease to 124.40p by mid-September.

The gradual ascent, in my view, is noteworthy.

Times have been very tricky for any player within the construction sector, however I believe that Costain has shown some real strength, with analysts expecting its pre-tax profits to have improved for the year to end-December 2025.

At Panmure Liberum, its analysts Joe Brent and Joe Walker rate the group's shares as a Buy, with a 190p Target Price.

They look for group sales to report a lower £1,109m against £1,251m in 2024, but with pre-tax profits of £52.1m (£48.5m), generating earnings of 14.4p (14.4p) but paying out a dividend of 3.0p (2.4p) per share.

For the year now underway they look for a recovery in revenues to £1,275m, with £56.4m profits, 15.9p earnings and a 3.1p per share dividend.

The year to end-December 2027 they estimate could see £1,402m turnover, £63.0m profits, giving 17.7p in earnings and easily covering a 3.2p per share dividend.

Over at Cavendish Capital Markets, analyst Max Hayes has pencilled in sales of £1,145m in 2025, with £47.0m profits, 13.1p earnings and a 2.8p dividend.

His figures for 2026 suggest £1,272m sales, £53.0m profits, 14.8p earnings and a dividend of 2.8p per share.

For 2027 he has £1,394.5m sales, £59.6m profits, 16.6p of earnings and a much heathier dividend of 4.6p per share.

Hayes has a Buy out on the shares with a 215p Target Price.

My View

The shares of Costain Group are totally undervalued, especially considering its potential recovery in sales while also boasting

in the balance sheet, compared to its £431m market capitalisation.

I do hope that the group will have some good corporate news to impart come the 26th, its shares now 161.60p are destined to climb to 200p in my view, if not even higher.

(Profile 05.09.19 @ 155p set a Target Price of 250p)

(Profile 02.08.21 @ 55p set a Target Price of 69p*)

(Profile 24.08.23 @ 50p set a Target Price of 62p*)

(Profile 20.08.25 @ 139p set a Target Price of 175p)