Balfour Beatty Shares Hit Record High on Contract Wins and Strengthening Order Book

Shares in Balfour Beatty (LON:BBY) hit an all-time high of 777.42p today, extending the construction and infrastructure group's year-to-date gains to 8.54% as markets responded to a combination of robust financial performance, major contract wins, and improving analyst sentiment.

The stock's ascent marks a significant milestone for the FTSE 250 constituent, which has transformed its fortunes through disciplined execution and strategic positioning in high-growth infrastructure markets.

The rally builds on momentum established in December 2025, when Balfour Beatty reported a 20% surge in its order book to £18.4 billion. That growth was primarily driven by substantial UK power generation contracts, including a landmark £3 billion agreement for the Sizewell C nuclear power plant.

The company now anticipates revenue growth exceeding 5% compared to the previous year, with underlying profit from operations expected to surpass the prior year's £252 million. These figures have materially improved the investment case, providing visibility on earnings growth that had previously been questioned by some market participants.

Contract momentum has extended beyond nuclear energy. Balfour Beatty secured over £3.5 billion in new power generation orders across the UK, positioning the firm as a primary beneficiary of the government's net-zero infrastructure push. Across the Atlantic, the company won an $889 million contract from the Texas Department of Transportation to reconstruct a section of Interstate 30 in Dallas County, reinforcing its strong foothold in the lucrative US infrastructure market. These wins demonstrate the company's ability to compete effectively in both domestic and international markets, diversifying revenue streams and reducing geographic concentration risk.

Analyst coverage has turned increasingly constructive. Morgan Stanley upgraded the stock to Equal Weight from Underweight, raising its price target to 640p on the improved revenue outlook. Berenberg went further, lifting its target from 660p to 710p, citing strong cash performance and growth opportunities in UK energy and US construction markets. While today's share price now trades above both targets, the upgrades reflect a broader reassessment of the company's strategic positioning and execution capabilities.

Price Targets

Management has reinforced confidence through capital allocation decisions. Balfour Beatty repurchased £189 million worth of shares in 2025 and announced plans for further buybacks in 2026. This commitment to shareholder returns, coupled with the expanding order book, signals management's conviction in the sustainability of current trading momentum. The buyback programme also provides technical support for the share price by reducing the outstanding share count.

Risks remain on the horizon. An £83 million charge related to building safety remediation serves as a reminder of legacy issues that periodically surface in the construction sector. Potential US tariffs on steel and other materials could pressure margins on American contracts, though the company's order book provides some buffer through price escalation clauses.

Nevertheless, today's record high reflects markets pricing in a favourable risk-reward profile as Balfour Beatty capitalizes on structural tailwinds in energy infrastructure and transportation.