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Grainger
(LSE:GRI)
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Rating:71Outperform
Price Target:
194.00 p
▲(12.07% Upside)
Action:Upgraded
Date:08/26/26
Overall score reflects (1) solid but mixed financial performance—stable leverage and strong profitability metrics offset by declining revenue and weaker operating cash flow conversion; (2) supportive earnings-call outlook with clear growth and margin guidance but acknowledged rate/valuation and regulatory risks; (3) attractive valuation (low P/E and solid yield) providing downside support; and (4) broadly neutral technical signals with modestly positive trend indicators.
Positive Factors
Rental Growth and Occupancy
Sustained rental growth and high occupancy support recurring income and demonstrate resilient demand. This combination can provide a durable base for earnings growth even as property-market conditions and tenant preferences evolve.
Negative Factors
Revenue and Cash Flow Decline
Contracting revenue and weaker operating cash conversion indicate that reported profitability is not translating fully into cash. Persistent weakness could constrain reinvestment, debt reduction and the company’s ability to absorb operating pressures.
Read all positive and negative factors
Positive Factors
Negative Factors
Rental Growth and Occupancy
Sustained rental growth and high occupancy support recurring income and demonstrate resilient demand. This combination can provide a durable base for earnings growth even as property-market conditions and tenant preferences evolve.
Read all positive factors
Grainger (GRI) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£1.24B
Dividend Yield3.49%
Average Volume (3M)2.78M
Price to Earnings (P/E)9.3
Beta (1Y)1.02
Revenue Growth-23.35%
EPS Growth20.53%
CountryUK
Employees372
SectorReal Estate
Sector Strength53
IndustryReal Estate - Services
Share Statistics
EPS (TTM)0.18
Shares Outstanding741,609,000
10 Day Avg. Volume2,868,610
30 Day Avg. Volume2,779,560
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.70
Price to Sales (P/S)5.54
P/FCF Ratio11.85
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£204.67Price Target Upside18.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)0.09
Revenue Forecast (FY)£163.57M
Grainger Business Overview & Revenue Model
Company Description
Grainger plc is a company based in the United Kingdom that focuses on the residential property sector. It is involved in all stages of the property lifecycle, from designing and owning residential buildings to their operation, management, and rent...
How the Company Makes Money
Grainger makes money primarily by purchasing industrial and MRO products from a large network of manufacturers and suppliers and reselling them to end customers at a markup, capturing gross profit on product sales. Revenue is driven by high-freque...
Grainger Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 19, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operational and financial picture: robust rental growth, high occupancy, disciplined capital recycling, clear earnings and dividend guidance, margin expansion driven by technology and scale, and proactive refinancing/deleveraging plans. The company acknowledged manageable headwinds — a modest NTA decline tied to a 100bp yield widening, timing disruption to disposals, ongoing cost pressures, interest‑rate sensitivity during the rebasing period, and a persistent share‑price discount to NTA — but articulated clear mitigation actions and targets. On balance the highlights substantially outweigh the lowlights.Positive Updates
Strong rental performance
Total rental income increased ~7.8% (referred to as nearly 8%); like‑for‑like rental growth of 3.1%; occupancy remained high at ~96% (range 95–97%).
Negative Updates
Slight decline in NTA and yield pressure
Reported NTA slightly lower than FY25; management noted a large outward yield movement of ~100 basis points which weighed on valuations despite rental growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong rental performance
Total rental income increased ~7.8% (referred to as nearly 8%); like‑for‑like rental growth of 3.1%; occupancy remained high at ~96% (range 95–97%).
Read all positive updates
Company Guidance
Grainger reiterated that it is on track for c.£60m EPRA earnings this year (a 12% increase from £54m) and c.£72m by FY29 (c.35% growth), assuming long‑run like‑for‑like rental growth of 3–3.5% (H1 like‑for‑like +3.1%) and with total rents up ~7.8% in H1; occupancy remains high at c.95–97% (around 96%), annual customer renewals ~61%, operational costs ~25% of gross rents and central overheads broadly flat at c.£36m (with a further £2m saving), while each new home adds an incremental margin of ~75% driving EBITDA margin expansion from 54% (FY24) to 56% (FY25) and guided to 60%+ by FY29. The group is recycling c.£850m of non‑core assets (YTD disposals £82m, on track for c.£175–200m), targeting deleveraging of £300–350m to net debt ~£1.1bn (LTV ~30%, net debt/EBITDA ~8x), models a rebased cost of debt around 5.5% (noting current fixes locked in mid‑3s for ~2 years), and has refinanced c.£540m of facilities to 2033, trimming banking margins by ~£1m p.a.Grainger Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
70
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 239.30M | 258.90M | 284.60M | 271.70M | 285.20M | 256.10M |
| Gross Profit | 154.90M | 164.80M | 162.10M | 160.90M | 161.10M | 151.50M |
| EBITDA | 69.70M | 145.50M | 80.40M | 126.30M | 121.40M | 113.50M |
| Net Income | 131.40M | 202.60M | 31.20M | 25.60M | 229.40M | 109.50M |
Balance Sheet | ||||||
| Total Assets | 3.76B | 3.77B | 3.74B | 3.72B | 3.58B | 3.27B |
| Cash, Cash Equivalents and Short-Term Investments | 150.90M | 85.80M | 93.20M | 121.00M | 110.20M | 317.60M |
| Total Debt | 1.66B | 1.60B | 1.60B | 1.54B | 1.36B | 1.35B |
| Total Liabilities | 1.78B | 1.73B | 1.85B | 1.79B | 1.61B | 1.53B |
| Stockholders Equity | 1.99B | 2.04B | 1.89B | 1.93B | 1.97B | 1.74B |
Cash Flow | ||||||
| Free Cash Flow | 90.40M | 121.00M | 132.30M | 178.60M | 98.30M | 147.70M |
| Operating Cash Flow | 91.70M | 122.40M | 136.60M | 184.70M | 102.00M | 148.00M |
| Investing Cash Flow | -108.20M | -59.10M | -167.70M | -274.10M | -274.20M | -315.90M |
| Financing Cash Flow | 7.50M | -70.70M | 3.30M | 114.50M | -49.50M | 116.40M |
Grainger Technical Analysis
Negative
173.10
Price Trends
173.86
Negative
166.93
Negative
171.90
Negative
Market Momentum
-1.69
Positive
36.62
Neutral
20.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GRI, the sentiment is Negative. The current price of 173.1 is above the 20-day moving average (MA) of 172.64, below the 50-day MA of 173.86, and above the 200-day MA of 171.90, indicating a bearish trend. The MACD of -1.69 indicates Positive momentum. The RSI at 36.62 is Neutral, neither overbought nor oversold. The STOCH value of 20.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:GRI.
Grainger Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | £248.67M | 15.28 | 20.71% | 4.47% | 5.96% | -2.01% | |
75 Outperform | £286.88M | 16.04 | 11.70% | 4.90% | 8.05% | 14.09% | |
71 Outperform | £1.24B | 9.30 | 6.53% | 3.49% | -23.35% | 20.53% | |
67 Neutral | £108.99M | 12.72 | 5.76% | 3.25% | -0.77% | -44.83% | |
67 Neutral | £1.68B | 22.39 | 8.94% | 3.39% | 7.29% | 20.68% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
47 Neutral | £135.99M | -26.22 | -2.38% | 0.12% | ― | ― |
* Real Estate Sector Average
GB:GRI
Grainger
166.10
-14.47
-8.02%
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GB:PSDL
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GB:SVS
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1,010.00
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11.81%
Grainger Corporate Events
Regulatory Filings and Compliance
Grainger Directors Receive Shares Under All-Employee Incentive Plan
Neutral
Aug 10, 2026
Grainger has disclosed routine transactions by directors and senior managers under its HMRC-approved Share Incentive Plan, in which employees buy partnership shares and receive matching shares at no cost. On 7 August 2026, the plan’s trustee...
DividendsRegulatory Filings and Compliance
Grainger CEO Helen Gordon Increases Stake via Dividend Reinvestment
Positive
Jul 21, 2026
Grainger plc has disclosed a director dealing involving chief executive officer and director Helen Gordon, who purchased 287 ordinary shares via the company’s Dividend Reinvestment Plan on 3 July 2026. The transaction, executed on the London...
Executive/Board ChangesRegulatory Filings and Compliance
Grainger Directors Receive Shares Under All-Employee Incentive Plan
Neutral
Jul 10, 2026
Grainger plc has disclosed routine share dealings by its directors and senior managers under its HMRC-approved Share Incentive Plan, in which employees buy partnership shares via monthly salary deductions and receive matching shares at no cost. Th...
Business Operations and StrategyRegulatory Filings and Compliance
Grainger Expands Employee Share Ownership With New SAYE Option Grants
Positive
Jul 7, 2026
Grainger plc has granted options over 753,873 ordinary shares at £1.32 per share under its HMRC-approved Save As You Earn scheme, following new invitations to employees. Participants have taken up either three-year contracts, covering 473,845...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Grainger Executives Receive Shares Under All-Employee Incentive Plan
Positive
Jun 11, 2026
Grainger plc has disclosed routine share transactions involving its senior management under its HMRC-approved Share Incentive Plan, an all-employee trust structure through which staff buy partnership shares and are awarded matching shares. On 8 Ju...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.