Synthomer’s Strategic Divestments Support Hold Rating Amid Cautious Outlook

In a report released today, Vanessa Jeffriess from Jefferies reiterated a Hold rating on Synthomer (SYNT – Research Report), with a price target of p107.00.

Vanessa Jeffriess’s rating is based on Synthomer’s recent strategic move to divest its non-core inorganic chemistry business, William Blythe, for £30 million. This disposal is seen as a positive step towards reducing the company’s leverage, as it was sold at a higher multiple than anticipated. Despite this beneficial transaction, the business was not currently affecting margins negatively, which suggests a neutral impact on the company’s overall financial health.
Furthermore, Synthomer’s plan to make additional divestments this year, potentially generating around £70 million, supports the Hold rating. These actions indicate a strategic focus on streamlining operations and improving financial stability, yet the overall outlook remains cautious, warranting a Hold rather than a Buy or Sell recommendation.

In another report released on May 2, UBS also maintained a Hold rating on the stock with a p100.00 price target.