Highlights

  • Berenberg and Panmure Liberum have both issued buy ratings on Balfour Beatty, assigning target prices of GBX 760 and GBX 800 respectively.
  • The company reports that it remains on track to meet full-year earnings expectations.
  • Additional share buybacks are planned for 2026.

Balfour Beatty (LSE:BBY) has attracted renewed confidence from analysts, with both Berenberg and Panmure Liberum issuing buy ratings on the international infrastructure group. The firms have set target prices of GBX 760 and GBX 800 respectively, signalling support for the company’s strategic direction and financial resilience heading into 2026. The positive analyst sentiment arrives as Balfour Beatty releases its latest trading update, outlining its operational progress and strengthening financial metrics across its core markets.

Financial Momentum Through 2025

In its update to 4 December 2025, Balfour Beatty confirmed it remains on track to deliver full-year earnings in line with expectations. The company expects its order book to expand by around 20% compared with FY2024, driven largely by continued momentum in UK Construction and more than GBP 3.5 billion in new power generation contracts. Revenue for 2025 is forecast to exceed the prior year by more than 5%, supported by growth in UK energy projects and rising demand within the US buildings market.

Underlying profit from operations in earnings-based businesses is set to surpass the GBP 252 million delivered in FY2024, with UK Construction and Support Services leading the improvement. Gains from Infrastructure Investment disposals remain on track to reach GBP 30–40 million, while average monthly net cash is expected to sit at the top end of the company’s GBP 1.1–1.2 billion guidance range—well above last year’s GBP 766 million.

Operational Progress Across Key Markets

The UK Construction division continues to perform strongly, maintaining progress toward achieving a 3% PFO margin for the year. Notable project milestones include the completion of the Bromford tunnel at HS2 Area North by the Balfour Beatty Vinci joint venture, major underground works at Hinkley Point C, and ongoing early works at the Net Zero Teesside carbon capture development. A major boost to future workloads came with the Programme Alliance Agreement for Sizewell C, which added approximately GBP 3 billion to the order book following the project’s financial close.

In the US, the business is set to deliver revenue growth of around 25%, reflecting strong pipeline conversion in the buildings segment. The US order book is expected to grow by more than 10% in 2025, aided by substantial new contracts including correctional facility projects and major data centre developments.

Operations in Asia, led by Gammon, have also made steady progress, with key infrastructure and housing projects advancing well and the order book holding stable.

Support Services and Investments Continue to Deliver

Support Services has seen further growth in its power transmission operations, with revenue expected to rise by around 15% in 2025. The division remains on track to achieve a PFO margin near the top of its 6–8% target range. Recent awards include major placements on National Grid’s High Voltage Direct Current supply chain framework and Scottish Power Energy Networks' overhead line infrastructure programme.

The Infrastructure Investments segment is on course to complete its 2025 disposal programme in the coming weeks, maintaining its anticipated profit contribution.

Looking Ahead to 2026

Balfour Beatty’s capital allocation framework remains unchanged, with GBP 189 million already returned to shareholders in 2025 through dividends and buybacks. The company plans to recommence further share repurchases in January 2026, with the full amount of the programme to be confirmed at the full-year results in March.