Elementis’s Strategic Divestment and Share Buyback Boost Financial Outlook and Support Buy Rating

Jefferies analyst Vanessa Jeffriess maintained a Buy rating on Elementis (ELM – Research Report) today and set a price target of p175.00.

Vanessa Jeffriess’s rating is based on the recent strategic moves by Elementis, which have significantly enhanced the company’s financial outlook. The sale of its Talc business for a higher-than-expected multiple of FY25 EBITA, along with a $50 million share buyback, has been pivotal. This transaction not only improves the quality of earnings but also alleviates a major concern that has been dampening investor interest.
Furthermore, the sale aligns with Elementis’s strategy to focus on its core specialty chemicals business, which is expected to lead to an improved EBITA margin and bring the company closer to its future financial targets. The reiterated guidance and anticipated positive market reaction further support the Buy rating, as these developments are likely to enhance shareholder value and drive the stock’s performance upward.