Panmure Gordon has maintained its 'hold' rating and 2,500p target price for plumbing merchant Wolseley ahead of the group's first-quarter trading statement next week.

The broker said that Wolseley's solid full-year results and a recent capital markets day in the US suggests a "steady Q1 outturn".

Full-year results reported in October were a touch ahead of expectations, Panmure said, with adjusted pre-tax profit up 14% year-on-years and a 33% increase in the dividend.

Analyst Andy Brown said: "Q4 like-for-like trends were +6.7% North America, +3.5% UK, -2.9% Nordic, -5.6% France and +0.7% Central Europe. The current year has begun with similar patterns to Q4, with North America ahead, UK recovering and Europe more uncertain. The trading outlook remains challenging with management retaining a focus on cost reduction."

He said that Panmure expects a tough outlook from Wolseley but guidance to be in line. Poor weather in the US and UK "may grab some extra headlines in terms of opportunity and disruption".

Brown said: "With the share price having recently sailed through our target price we believe it is right to now lock in some profits so we recently cut our recommendation to 'hold'. The medium-term attraction of North America remains in place so any price weakness will prompt us to revisit our recommendation."

Shares were up 0.31% at 2,891p on Friday morning.

BC

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