RBC Capital Markets starts SIG at 'outperform'

22nd Jun 2015 13:20

RBC Capital Markets initiated coverage of SIG at 'outperform' with a 250p price target, saying the company is taking important steps to improve its operating performance and drive returns."We believe SIG is in a position to continue taking market share, improve margins, and has a balance sheet that provides options for returns of cash to shareholders," said RBC, noting that this potential is not reflected in the company's valuation.RBC forecasts earnings per share compound annual growth rate of 12% between 2014 and 2018, driven in part by a recovery in the UK non-residential construction sector, boosted by an improved outlook in Germany and a stabilisation in France."We assume underlying growth in SIG's construction markets. A recovery is underway in the UK; we expect moderate growth in Germany; and we believe that France has stabilised," said RBC.At 13:37, SIG shares were up 3.6% at 205.80p.