Balancing Operational Improvement and Financial Strain: Rationale for Maintaining a Hold Rating

Jefferies analyst Vanessa Jeffriess maintained a Hold rating on Synthomer today and set a price target of p65.00.

Vanessa Jeffriess has given his Hold rating due to a combination of factors that balance improving operational signs with ongoing financial pressure. The latest trading update was broadly in line with expectations, with earnings slightly softer than forecast but leverage appearing better mainly because of a short-term receivables financing arrangement rather than structural cash improvement. End-market dynamics are mixed: volumes in the fourth quarter likely outperformed some peers, supported by relatively stronger demand in coatings and gloves, while construction-related activity remained weak.

Looking ahead, she notes some positive drivers such as encouraging volume momentum, planned non-cyclical growth in the acrylonitrile styrene (AS) segment, and continuing cost-reduction initiatives. However, these are tempered by a still challenging macro environment, margin headwinds from wage inflation, and slower-than-hoped progress in reducing debt. On her analysis, a realistic range of outcomes for 2026 EBITDA sits around or below current consensus, suggesting limited upside to forecasts at this stage. Taken together, these elements justify maintaining a neutral, Hold stance rather than moving to a more positive recommendation.

In another report released today, TipRanks – Google also reiterated a Hold rating on the stock with a p55.00 price target.

Based on the recent corporate insider activity of 6 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SYNT in relation to earlier this year.