In a report released today, David Farrell from Jefferies maintained a Hold rating on Morgan Advanced Materials, with a price target of p210.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
David Farrell has given his Hold rating due to a combination of factors impacting Morgan Advanced Materials. The company’s organic revenue in the first half of 2025 declined less than expected, and EBITA exceeded forecasts, which is a positive aspect. However, the overall outlook suggests a potential 5% downgrade in EBITA for the fiscal year 2025 and a probable 10% downgrade for 2026. This is attributed to a more adverse revenue mix, with higher-margin semiconductor segments declining more than anticipated, while lower-margin aerospace and defense segments perform better.
Despite some market stabilization, Morgan Advanced Materials remains cautious about the extent of volume recovery. Additionally, the company has highlighted £7 million in start-up costs for new semiconductor facilities, which will affect underlying results despite being one-time expenses. Although there are expected savings of £3 million from business simplification efforts, the overall year-over-year EBITA growth appears limited, contributing to the Hold rating.
Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MGAM in relation to earlier this year.