Berenberg drops target price on Essentra
By Iain Gilbert
Date: Tuesday 21 Jan 2025
(Sharecast News) - Analysts at Berenberg lowered their target price on essential components manufacturer Essentra from 200.0p to 170.0p on Tuesday, stating it had tempered its outlook for the group's FY25 trading performance.
Essentra said trading conditions in Q4 continued to be mixed for the group, with EMEA region revenues softening further, trading in the Americas stabilising, and Asia-Pacific delivering a steady improvement.
Berenberg stated that on account of expected continued revenue declines in the EMEA region, it thinks it prudent to expect a flat sales performance in FY25 at the group level.
Further, due to differing regional profitability profiles, the German bank's updated regional mix assumptions lead it to downwardly revise its FY25 group underlying earnings forecasts from roughly £45.0m to approximately £36.0m - a 20% downgrade.
"While disappointing, we expect this now marks trough-earnings for the group, on a trough multiple (15.2x FY 2025 P/E, or 12.5x FY 2026 before any share price movement) and we continue to view Essentra as well placed to benefit when markets (particularly in Europe) eventually normalise," said Berenberg, which reiterated its 'buy' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com
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