Analyst David Farrell of Jefferies maintained a Buy rating on Hill & Smith Holdings, retaining the price target of p2,300.00.
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David Farrell has given his Buy rating due to a combination of factors that highlight the positive outlook for Hill & Smith Holdings. The company has announced a significant £100 million share buyback, which represents 6.3% of its market capitalization. This move is expected to positively impact the share price, especially after a year of volatility.
Additionally, the company’s financial health is strong, with a low Net Debt to EBITDA ratio, allowing the buyback to proceed without significantly increasing leverage. Hill & Smith Holdings continues to pursue its M&A strategy, which is evident from ongoing discussions, and its US platform businesses are performing well, contributing to favorable revenue and higher margins. The company’s outlook aligns with market expectations, easing concerns about a potential US slowdown and capital allocation issues.