Analyst Andrew Douglas from Jefferies maintained a Buy rating on Bodycote (BOY – Research Report) and keeping the price target at p790.00.
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Andrew Douglas has given his Buy rating due to a combination of factors that suggest a positive outlook for Bodycote. The company’s recent AGM Trading Update indicates a promising sequential improvement compared to the second half of 2024, alongside new contracts in Specialist Technologies and strategic advancements. Management’s expectations for the fiscal year 2025 align with market consensus, and the company’s ongoing ‘Optimise, Perform & Grow’ strategy is progressing as planned, with additional cost-saving measures being explored.
Despite a mixed start to the year, with the Specialist Technologies division underperforming relative to the PHT division, Bodycote’s performance remains robust. The company continues to outperform in its underlying automotive markets, and the aerospace and defense sector recovery is contributing positively. New contracts and cost-saving initiatives, along with management’s focus on cost control, provide reasons for optimism. The company’s strong balance sheet offers management flexibility, supporting a resilient outcome for fiscal year 2025 and potential for improved sales growth and EBITA margins in the medium to long term.