Victrex Faces Structural Challenges Despite Cost-Saving Measures: Hold Rating Maintained

In a report released today, Vanessa Jeffriess from Jefferies reiterated a Hold rating on Victrex, with a price target of p650.00.

Vanessa Jeffriess has given her Hold rating due to a combination of factors, primarily revolving around the challenges Victrex faces despite potential cost-saving measures. The appointment of a new CEO has sparked some optimism about the company’s ability to implement long-awaited self-help strategies. However, Jeffriess remains cautious, as the anticipated cost reductions may not be sufficient to counterbalance the ongoing issues related to volume and pricing.
Jeffriess acknowledges the potential benefits of a more aggressive cost-saving approach, which contributes to maintaining a Hold rating. Nevertheless, she highlights that the core challenges for Victrex are more profound, as the company struggles with limited volume growth opportunities and persistent structural headwinds. These issues, coupled with material substitution and increased competition, suggest that the cost savings might only serve to mitigate pricing pressures rather than drive significant growth. Therefore, Jeffriess is comfortable with forecasts that remain below the consensus.