Analyst David Farrell from Jefferies maintained a Buy rating on Volution and keeping the price target at p820.00.
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David Farrell has given his Buy rating due to a combination of factors that highlight Volution’s strategic growth and financial stability. The recent acquisition of AC Industries in Australia is a significant move, as it not only expands Volution’s presence in the lucrative mining market but also adds to the company’s earnings per share by approximately 5% by FY27F. The acquisition is attractively priced at 10 times the last twelve months EBITA, which is favorable when compared to similar transactions in the industry.
Furthermore, Volution’s organic revenue growth of 5% at the start of FY26F, which surpasses the forecasted 4%, demonstrates the company’s robust performance. The consistent margins and the reasonable leverage ratio, expected to decrease from 1.8x to 1.5x by the end of FY26F, indicate a strong financial position that does not overextend the balance sheet. These factors, combined with the strategic shift towards more commercial and niche industrial markets, support the positive outlook and justify the Buy rating.
Based on the recent corporate insider activity of 6 insiders, corporate insider sentiment is neutral on the stock.