Renewi (RWI) could be in for a tougher second half buts its discount to peer Biffa (BIFFA) is still unjustified, says Liberum.
Analyst Joe Brent maintained his ‘buy’ recommendation and £10.12 target price on the stock, which closed down 0.4% at 563p on Monday.
A scheduled updated indicated that trading was in line with full expectations, although there has been lower volumes in construction and green waste, a trend expected to continue in the second half. Liberum assumes 54% of earnings per share for the full year will be generated in the first half.
‘Exit multiples in the waste sector imply that Renewi’s share price could double. We maintain our target price…and believe the discount to Biffa is unjustified,’ said Brent.
Source: citywire.co.uk