Synthomer: Solid Self-Help Progress but Mixed Divisional Trends Keep Rating at Hold

Synthomer, the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Thomas Wrigglesworth from Morgan Stanley maintained a Hold rating on the stock and has a p104.00 price target.

Thomas Wrigglesworth has given his Hold rating due to a combination of factors related to Synthomer’s recent trading update and financial position. The company’s second-half 2025 EBITDA performance is solid and slightly ahead of his own estimates, and near-term balance sheet risk has been eased by a receivables facility with the largest shareholder. However, full-year 2025 sales are expected to fall short of consensus, and while EBITDA is broadly in line, the upside is driven mainly by cost-cutting and self-help measures rather than underlying market strength. Net debt remains elevated, with leverage still high even though it stays within covenant limits, and free cash flow, although better than expected, is modest.

Thomas also notes that divisional trends are mixed: adhesive solutions are regaining share and improving margins, but coatings are seeing uneven demand and construction-related weakness, in line with sector peers. The medical glove segment is showing early signs of recovery, yet this is not sufficient to underpin a strong, broad-based growth story for the group. Looking ahead to 2026, expected profit improvement is largely dependent on further self-help savings, which will be partly offset by wage and bonus cost pressures. Taken together, these elements suggest some operational progress and limited downside support, but not enough visibility or momentum to justify a more positive stance than Hold at this stage.

In another report released today, Jefferies also maintained a Hold rating on the stock with a p65.00 price target.

Based on the recent corporate insider activity of 6 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SYNT in relation to earlier this year.