Berenberg raises target price on RHI Magnesita
By Iain Gilbert
Date: Wednesday 05 Feb 2025
(Sharecast News) - Analysts at Berenberg hiked their target price on RHI Magnesita from 4,150.0p to 4,400.0p on Wednesday, noting that the group's recent acquisition of Resco had provided it with better US access.
Berenberg thinks that the near-term restructuring from the acquisition will have an impact on its forecasts. However, it also expects upside from this decision over time, as footprint efficiencies and supply chain streamlining come through, helped by Resco's US focus serving to improve RHI Magnesita's US manufacturing base.
The German bank updated its forecasts to include the acquisition of Resco in 2025, resulting in a 4-6% upgrade to its 2025 and 2026 forecasts.
Berenberg also acknowledged that the outlook was changeable and expect that the group's guidance at its FY24 results in a few weeks will likely "keep a lid on expectations" for the moment but it also noted that it includes little in the way of medium-term synergies in its forecasts, so said upside risk remains over time.
"RHI Magnesita trades on 7.5x 2025 P/E. Our new 4,400.0p target price reflects our 10x 2025 P/E for this stock and we maintain our 'buy' rating," said Berenberg.
Reporting by Iain Gilbert at Sharecast.com
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