Peel Hunt has reiterated its ‘buy’ rating and 1,400p target price on Savills PLC (LSE:SVS), the FTSE 250 property services group, after an annual general meeting update showed trading running marginally ahead of board expectations.
The broker said the shares, which have fallen 16% year to date, now trade on a price-to-earnings ratio (a measure of how much investors pay per pound of profit) of around 9 times forecast 2026 earnings, with an enterprise value to EBITDA multiple of roughly 5 times.
Savills said commercial transaction activity has held up well, with the United States performing strongly and Asia-Pacific firmer, though business across Europe and the UK was modestly lower.
Pipelines across the commercial business remain strong and continue to build, with the group expecting its traditional second-half weighting to revenues.
The UK residential market started the year well, though Savills noted some caution since the onset of the Iran conflict, with London outperforming the regions.
Peel Hunt said residential activity is likely to be mixed, with a softer Middle Eastern market offsetting stronger performances in the UK and Asia.
The group’s less transactional businesses, including property management and investment management, continue to perform in line with expectations.
Savills’ planned acquisition of Eastdil Secured, the US-focused real estate investment bank, remains on track for completion at the end of July.
Peel Hunt said it continues to view the Eastdil deal as transformational for the group and noted that its forecasts, unlike those of some rival brokers, already include the impact of the acquisition.
The broker made no changes to its earnings estimates following the update.
At current levels, Peel Hunt’s 1,400p target price implies upside of more than 30% from the recent share price, suggesting the market has yet to price in the potential benefits of the Eastdil deal alongside a recovery in transaction volumes.