Best FTSE 350 companies include Morgan Sindall and 3i Group
On a day when stock markets extended gains to record highs, Graeme Evans runs through some of the highlights from the country’s biggest companies.
2nd October 2025 15:33
by Graeme Evans from interactive investor
The latest profit upgrade by Morgan Sindall Group (LSE:MGNS) and a City bank’s view that 3i Group Ord (LSE:III) is at an “attractive entry point” today lifted their shares to the top of the FTSE 350 index.
The private equity group, whose largest portfolio asset is the top-performing discount chain Action, rose 450p to 4,292p after UBS switched to a Buy stance and 4,700p target price.
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It sees the potential to reach 5,400p in an upside scenario where Action growth accelerates and the rest of 3i’s portfolio assets receive a more favourable valuation.
The shares have resumed their rally in recent days after Action maintained its like-for-like sales growth rate at 6.5%, despite consumer spending pressures in France and Germany.
Europe-focused Action remains on track to deliver or exceed 370 net new stores in 2025, having opened its 3,000th outlet in June.
The bank’s analysis suggests that the implied valuation of Action within 3i’s share price has plateaued in the last 18 months. This coincides with a period during which Action like-for-like sales have slowed to more normal levels.
UBS said: “From here, as Action’s like-for-like sales trends stabilise (with upside risk), we see scope for 3i share price to outperform, supported by the steady compounding growth story at Action.”
The bank estimates that Action accounts for more than 70% of 3i’s Portfolio and even more of its gross investment returns. Beyond Action, 3i recently successfully exited two 2020-21 vintage assets at a multiple of 2.5 times invested capital.
It said: “We see the shares offering an attractive entry point into the Action growth story, with the added benefit of likely higher realisations and returns from the rest of 3i’s investment portfolio in a recovering private equity cycle.”
Company | Price | Market cap (m) | 1 month change (%) | %chg 31/12/24 | 1 year month change (%) | Forward dividend yield | Forward PE |
4782.5p | £2,247 | 18.1 | 22.6 | 54.8 | 3.3 | 13.4 | |
Aston Martin Lagonda Global Holdings Ordinary Shares (LSE:AML) | 86.225p | £873 | 18.5 | -19.1 | -20.5 | ||
450.1p | £29,139 | 5.9 | 22.2 | 26.8 | 3.3 | 15.7 | |
4289.5p | £42,267 | 10.4 | 20.4 | 31.6 | 2.0 | 6.8 | |
1186p | £1,226 | -10.6 | -17.6 | -7.1 | 13.3 | ||
1949p | £1,110 | 10.4 | -9.6 | -5.2 | 1.2 | 18.0 | |
4817.5¢ | £6,890 | -10.8 | 10.6 | ||||
574p | £979 | 2.5 | 15.0 | 12.5 | 0.8 | 6.6 | |
380.9p | £877 | 19.5 | -31.9 | -16.8 | 9.3 | ||
2828p | £3,948 | 13.8 | -16.5 | -31.6 | 4.0 | 19.3 |
Source: ShareScope. Past performance is not a guide to future performance.
Morgan Sindall topped the FTSE 350 index on the day its shares were marked ex-dividend after it said 2025 results will be significantly ahead of previous expectations.
The upgrade means that the construction, fit-out and partnerships housebuilder has lifted guidance 11 times in the past decade.
Shares have risen by more than 500% over that period, including today’s rise of 355p to 4,730p for a market capitalisation of £2.3 billion.
Bank of America sees further upside after lifting its price target to 5,200p, while Peel Hunt moved to 5,000p in the wake of today’s unscheduled update.
Today’s upgrade was driven by the continued strong performance of its Morgan Lovell and Overbury fit-out division.
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Peel Hunt now expects the office-focused division to deliver 2025 profits of £138 million, up from a previous forecast of £119 million.
The bank notes profits were £52 million in 2022, implying an organic compound annual growth rate of 38%. It added: “We acknowledge favourable market dynamics and the insolvency of its major competitor (ISG), but this is still a very impressive performance.”
Morgan Sindall forecasts a return to divisional profits between £80 million and £100 million in the medium term, although Bank of America still sees potential for a profit beat in 2026.
It said: “The company expects a more normalised profit margin after a good increase in the past two years.
“However, we believe there is a low chance that any market participant will gain a substantially higher market share in the short term given the constraint on labour force, plus the company turned more positive on this market in half-year results.”
Cash generated from the fit out and construction businesses is invested into the company’s housing and mixed-use Partnerships division in order to create longer-term value for the group and shareholders.
It is due to pay shareholders a 50p a share on 23 October, representing an increase of 20% on a year earlier
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