Keller Group: Exceptional NA performance drives upgrades; PO raised to 3,400p

Research evidence excerpt

Keller Group: Exceptional NA performance drives upgrades; PO raised to 3,400p

Estimate revisions: EPS raised by 6-9%

We make the following changes to our model:

Revenue: We increase our FY26 revenue forecast by 9%, reflecting stronger-than-

expected momentum in North America. Looking beyond FY26E, we raise our outer-year

revenue forecasts by 8-11%, supported by a record £1.9bn order book (+19% y/y, +27%

h/h, +12% q/q) and improving visibility beyond the c.6-month horizon typically

associated with the business. We believe current US demand is being driven by

structural growth drivers, including infrastructure investment, grid upgrades and data

centre construction.

EBIT: We increase our FY26 EBIT forecast by 9%, reflecting both stronger volumes and

favourable project mix in North America. Given the strength of the backlog and our

confidence that current end-market demand is more structural than cyclical, we also

raise our FY27-28E EBIT forecasts by 8-11%.

EPS: We increase FY26 EPS by 8%, slightly less than the increase in operating profit.

This primarily reflects the stronger-than-expected share price performance since our

initiation in March 2026 (+58%), which reduces the prospective accretion from the

buyback programme relative to our previous assumptions.

DPS: We maintain our dividend payout assumptions meaning that DPS increases at the

same rate as EPS. Given Keller's strong cash generation, clean balance sheet and

increasing earnings visibility, we continue to see scope for sustainable dividend growth

alongside buybacks.

Potential upside: We continue to see upside to our forecasts should US residential

activity recover, improving utilisation at Suncoast, Keller's most operationally geared

business.