Analyst Vanessa Jeffriess of Jefferies maintained a Hold rating on Synthomer, with a price target of p65.00.
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Vanessa Jeffriess has given his Hold rating due to a combination of factors that balance improving trading momentum with ongoing balance sheet risk. Recent volume gains driven by the changed competitive landscape and the company’s ability to push through higher prices have made the current-year EBITDA outlook more secure, even though overall guidance has not been raised and the operational backdrop remains uncertain.
At the same time, Synthomer’s elevated leverage and higher interest burden after the refinancing continue to constrain upside to the equity story, tempering the otherwise more upbeat trading update. The modest outperformance versus expectations in key divisions and the appointment of a new CFO are viewed positively, but, in Jeffriess’s view, they are not yet sufficient to justify a more constructive stance than Hold given the remaining financial and macro risks.