Broker tips: Morgan Advanced Materials, Hochschild Mining, Reckitt
By Iain Gilbert
Date: Thursday 23 Oct 2025
(Sharecast News) - Berenberg initiated coverage of Morgan Advanced Materials on Thursday with a 'buy' rating and 250p price target as it said the group's end-markets continue to face significant challenges and dislocations.
"However, with 2026 consensus earnings per share having fallen by circa 45% over the past 18-24 months, high-margin semiconductor customers reporting sequential revenue improvement and potentially returning to year-on-year growth ahead of restocking in 2026, and a strategic update due from new CEO Damien Caby in December 2025, we see catalysts that could underpin improved share price performance, while acknowledging that current weak earnings momentum makes timing the inflection difficult," said Berenberg.
It also noted that Morgan will hold a capital markets event on 4 December, at which Caby will present an updated strategy, stating that this was a key near-term catalyst to demonstrate the medium-term potential in the group. Additionally, Berenberg highlighted that the stock's current valuation was inexpensive.
"While not blow-out cheap on free cash flow yield (6.2%) or EV/EBITA (9.2x), the current dividend yield of 5.9% is supportive and we see value here at 10.8x 2026 P/E if the group can provide a credible path to growth recovery and margins in the teens, in keeping with its existing medium-term goals," it said.
Berenberg said consensus estimates were still coming down towards its forecasts following the recent trading update but, with the stock near the lows of its 10-year trading range and scope for some markets to improve in 2026, it sees risk/reward tilted to the upside.
Analysts at Berenberg also raised their target price on silver and gold miner Hochschild Mining from 380p to 400p on Thursday following the group's "stable" third quarter production report.
Berenberg said Hochschild's gold and silver production broadly met its forecasts, although sales lagged due to a deliberate $40m product inventory/receivables build at San José in Argentina, to protect against a potential currency devaluation following the Argentine mid-term elections on 26 October.
Guidance for 2025 production and unit costs was maintained as its Mara Rosa asset, in Brazil, continued its turnaround, with limited output in Q3.
Overall, the German bank said Hochschild's Q3 was "fairly stable", and while the company's Argentina exposure "remains a source of uncertainty", it noted that San José contributes only 7% of its net asset value.
The stock, on which Berenberg has a 'hold' rating, closed down 3.8% on the day of release amid a broader selloff in gold miners.
"We update our model to account for the results and factor in Hochschild's stake in the Volcan gold project in Chile (expected by the company to list in Toronto via Tiernan Gold in November, with Hochschild retaining 87% ownership). Our NAV increases by 5%, which lifts our price target to 400p," said Berenberg, which also noted Hochschild shares were currently trading on 0.86x NAV and 3.3x 2026 underlying earnings.
Over at RBC Capital Markets, analysts hiked their target price on consumer goods giant Reckitt from 6,000p to 6,400p on Thursday following the group's Q3 trading update a day earlier.
RBC Capital said Reckitt was building a track record of "consistently delivering midsingle-digit top-line growth", supported by the resilience of its categories and its improved execution.
"This gives us higher confidence in its mid-term growth outlook, moving our Core Reckitt growth estimates close to the mid-point of the guided range," said Reckitt.
On its upgraded growth estimates, the Canadian bank said Reckitt trades "attractively" versus its peers, even considering an overhang from NEC litigation.
"Our mid-term LFL revenue growth estimates for Core Reckitt move close to the mid-point of its guided +4-6% range. On the back of our higher forecasts, our price target increases to £64 (from £60 previously)," said RBC, which maintained its 'outperform' stance on the stock.
"Despite its strong share price performance year-to-date, already outperforming the sector by 17%, its shares still trade attractively. On our updated estimates, Reckitt trades on 2026e EV/NOPAT of 17.4x, compared to European Food & HPC average of 20.4x."
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