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1. Company Snapshot

1.a. Company Description

Costain Group PLC provides smart infrastructure solutions for the energy, water, transportation, and defense markets in the United Kingdom.The company operates through two segments, Transportation and Natural Resources.The Transportation segment operates in the road, rail, and integrated transport markets.


The Natural Resources segment operates in the water, energy, and defense markets.It offers future shaping strategic consultancy, consultancy and advisory, digital technology, asset optimization, and complex program delivery solutions and services.The company was founded in 1865 and is headquartered in Maidenhead, the United Kingdom.

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1.b. Last Insights on COST

Costain Group PLC's recent performance has been negatively driven by a significant discount to its estimated fair value. According to a recent analysis, the company's fair value estimate is £2.10, implying a 47% discount. This suggests that the market may be underestimating Costain's value. Additionally, the company's recent share buyback program, which aims to repurchase up to £50 million of shares, may indicate management's confidence in the company's future prospects and desire to return value to shareholders.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Why Costain Group PLC (LON:COST) Could Be Worth Watching

Nov -03

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Is Costain Group PLC's (LON:COST) Recent Stock Performance Tethered To Its Strong Fundamentals?

Oct -13

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Costain Group First Half 2025 Earnings: EPS: UK£0.054 (vs UK£0.049 in 1H 2024)

Aug -23

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Costain Group PLC (LSE:COST) (H1 2025) Earnings Call Highlights: Strong Operating Profit Growth ...

Aug -21

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Is Costain Group PLC (LON:COST) Trading At A 37% Discount?

Jun -24

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Stocks to watch this week: Broadcom, Lululemon, British American Tobacco, Dr Martens and Rémy Cointreau

May -30

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Should You Think About Buying Costain Group PLC (LON:COST) Now?

May -22

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Costain Group PLC's (LON:COST) Stock Is Going Strong: Is the Market Following Fundamentals?

May -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.81%)

6. Segments

Transportation

Expected Growth: 6.15%

Costain Group PLC's Transportation segment growth of 6.15% is driven by increasing government investments in infrastructure projects, rising demand for sustainable transportation solutions, and strategic contract wins in the rail and highways sectors. Additionally, the company's focus on digitalization and innovation is enhancing operational efficiency and driving growth.

Natural Resources

Expected Growth: 8.4%

Costain Group PLC's Natural Resources segment growth of 8.4% is driven by increasing demand for sustainable infrastructure, government investments in renewable energy, and strategic partnerships with key clients. Additionally, the company's focus on digital solutions and innovative technologies has improved operational efficiency, contributing to the segment's growth.

7. Detailed Products

Infrastructure Services

Costain Group PLC provides infrastructure services, including design, construction, and maintenance of roads, bridges, and other critical infrastructure projects.

Natural Resources

Costain Group PLC offers natural resource management services, including water and waste management, to support sustainable development.

Transportation

Costain Group PLC provides transportation services, including rail, road, and airport infrastructure development and maintenance.

Energy and Process

Costain Group PLC offers energy and process services, including design, construction, and maintenance of energy infrastructure projects.

Nuclear

Costain Group PLC provides nuclear services, including design, construction, and maintenance of nuclear facilities and infrastructure.

Water and Waste

Costain Group PLC offers water and waste management services, including design, construction, and maintenance of water and waste infrastructure.

8. Costain Group PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Costain Group PLC is medium due to the presence of alternative infrastructure development companies, but the company's strong brand reputation and expertise in complex infrastructure projects mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers for Costain Group PLC is low due to the company's strong relationships with its clients and the customized nature of its infrastructure development projects.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Costain Group PLC is medium due to the company's dependence on a few large suppliers for materials and equipment, but the company's strong relationships with its suppliers mitigate this threat.

Threat Of New Entrants

The threat of new entrants for Costain Group PLC is low due to the high barriers to entry in the infrastructure development industry, including the need for specialized expertise and equipment.

Intensity Of Rivalry

The intensity of rivalry for Costain Group PLC is high due to the competitive nature of the infrastructure development industry, with several large players competing for a limited number of projects.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 9.97%
Debt Cost 15.95%
Equity Weight 90.03%
Equity Cost 15.95%
WACC 15.95%
Leverage 11.08%

11. Quality Control: Costain Group PLC passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Multiconsult

A-Score: 6.5/10

Value: 5.6

Growth: 7.6

Quality: 5.8

Yield: 8.8

Momentum: 4.0

Volatility: 7.0

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Kier

A-Score: 5.3/10

Value: 7.1

Growth: 4.9

Quality: 3.8

Yield: 1.9

Momentum: 9.5

Volatility: 4.7

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Afry

A-Score: 5.1/10

Value: 6.2

Growth: 5.2

Quality: 5.2

Yield: 6.2

Momentum: 3.0

Volatility: 4.7

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MT Højgaard Holding

A-Score: 5.0/10

Value: 6.6

Growth: 4.4

Quality: 5.2

Yield: 1.2

Momentum: 10.0

Volatility: 2.3

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Costain

A-Score: 5.0/10

Value: 6.3

Growth: 4.4

Quality: 5.5

Yield: 2.5

Momentum: 8.0

Volatility: 3.0

1-Year Total Return ->

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Trakcja

A-Score: 4.5/10

Value: 8.0

Growth: 3.6

Quality: 4.6

Yield: 0.0

Momentum: 8.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.55$

Current Price

1.55$

Potential

-0.00%

Expected Cash-Flows