Balfour Beatty Stock Climbs With Profit Upgrade But It Has Further to Rise

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Photograph by Simon Dawson/Bloomberg Balfour Beatty Stock Climbs With Profit Upgrade But It Has Further to Rise Balfour Beatty Stock Climbs With Profit Upgrade But It Has Further to Rise Balfour Beatty Stock Climbs With Profit Upgrade But It Has Further to Rise

Balfour Beatty’s stock climbed on Thursday, as the infrastructure giant upgraded its full-year profit forecast and signaled strong order book growth.

Balfour Beatty Stock Climbs With Profit Upgrade But It Has Further to Rise

Balfour Beatty’s stock climbed on Thursday, as the infrastructure giant upgraded its full-year profit forecast and signaled strong order book growth.

https://www.marketwatch.com/story/balfour-beatty-profit-rises-26-2019-08-14 https://www.barrons.com/articles/balfour-beatty-stock-pick-51567789441 Balfour Beatty Stock Climbs With Profit Upgrade But It Has Further to Rise By Callum Keown Photograph by Simon Dawson/Bloomberg

Balfour Beatty’s stock climbed on Thursday, as the infrastructure giant upgraded its full-year profit forecast and signaled strong order book growth.

The construction company said it expected full-year revenue to be around 5% higher than last year’s £7.8 billion and its order book, not including work on the HS2 high speed rail project, to reach £14 billion.

The stock moved 4.2% higher in early trading in London. Despite the rise, shares remain slightly down so far in 2019, as uncertainty over Brexit has damaged investor sentiment, business confidence and the U.K.’s construction sector as a whole. The infrastructure sector has secured fewer contracts as a result of the uncertainty and Balfour Beatty has looked to boost its balance sheet and profitability in its home market instead.

Profit from operations will be ahead of the company’s expectations, it said on Thursday, while average monthly net cash is forecast to be £310 million—ahead of previous guidance of between £280 and £300 million.

Allegations that the company’s U.S. housing businesses had falsified maintenance records at an Oklahoma Air Force base has also contributed to the negativity around the stock.

The company said that an audit firm has now been hired to conduct investigation into work carried out across its 21 U.S. Air Force bases.

Looking ahead.

Britain’s construction industry has had a rough time in recent years but Balfour Beatty’s outlook is encouraging. Uncertainty over the U.K. economy and Brexit still hangs over the stock, but the company’s performance looks strong.

More than half of its revenue comes from outside the U.K., with a large portion from the U.S., reducing its exposure to a domestic economic shock. A resolution over Brexit—or even a strong election victory for Boris Johnson’s Conservative Party—would send the undervalued stock higher.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.