Summary of Q320 Travis Perkins organic sales grew by +3.8% in Q320 vs. +1% consensus expectations on the back of a strong recovery, driven by buoyant DIY trends and robust RMI activity offsetting continuing pressure in new-housing and non-residential markets. Key news The group highlighted a strong pick-up of activity in September with l-f-l sales growing by +8% and higher workloads in the new-housing sector implying Q420 trends should remain in positive territory unless restrictive lockdown measures are introduced. Management now expects FY20 EBITA in the upper-half of consensus expectations (GBP222-261m), implying mid-single digit consensus upgrades. In terms of capital allocation, management mentioned that it will await the upcoming winter period and the trading conditions during this period to update the market on both its dividend policy and portfolio recycling strategy. Earnings We have integrated the faster than expected volume recovery and increased our EBITA expectations by +4% in 2020 and +2% in 2021. Rating and target price Our earnings upgrade is the main driver of our increase in target price to GBp1,445 from GBp1,415. We reiterate our Outperform rating. Investment case We believe the market is discounting near-term distress and forgetting the group''s competitive advantages coming out the other side.