Morgan Advanced Materials PLC (GB:BA05)
LSE:BA05
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Morgan Advanced Materials
(LSE:BA05)
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Rating:55Neutral
Price Target:
68.00 p
▼(-13.65% Downside)
Action:Reiterated
Date:04/02/26
Overall score reflects solid recent cash generation and constructive (but cautious) 2026 guidance for modest growth and margin recovery, offset by the sharp recent profit decline and a moderately leveraged balance sheet. Technicals are notably weak, and the provided valuation metrics are not interpretable, which caps the score.
Positive Factors
Cash generation resilience
Improved operating cash flow and a stronger free cash flow outturn in 2025 provide durable liquidity to fund capital expenditure, ERP and transformation programs, support the dividend and allow targeted debt reduction. This strengthens the company's ability to execute strategic fixes across cycles.
Negative Factors
Exposure to semiconductor cyclicality
Material exposure to semiconductor end markets created a sizable revenue hit and an asset impairment, demonstrating structural cyclicality risk. Continued inventory adjustments and silicon carbide market swings can suppress revenue and margins over multiple quarters and complicate forecasting and recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation resilience
Improved operating cash flow and a stronger free cash flow outturn in 2025 provide durable liquidity to fund capital expenditure, ERP and transformation programs, support the dividend and allow targeted debt reduction. This strengthens the company's ability to execute strategic fixes across cycles.
Read all positive factors
Morgan Advanced Materials (BA05) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£623.32M
Dividend Yield608.88%
Average Volume (3M)0.00
Price to Earnings (P/E)30.0
Beta (1Y)0.18
Revenue GrowthN/A
EPS GrowthN/A
CountryUK
Employees8,100
SectorBasic Materials
Sector Strength58
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.08
Shares OutstandingN/A
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio-0.50
Price to Book (P/B)1.93
Price to Sales (P/S)0.61
P/FCF Ratio11.39
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Morgan Advanced Materials Business Overview & Revenue Model
Company Description
Morgan Advanced Materials PLC is a British enterprise specializing in the production of a diverse portfolio of advanced, high-performance materials. Its extensive product catalog encompasses high-temperature insulation, engineered to minimize ener...
How the Company Makes Money
Morgan Advanced Materials makes money primarily by selling engineered components and systems made from advanced ceramics, carbon and composites, along with related design, engineering and manufacturing services. Revenue is generated through (1) pr...
Morgan Advanced Materials Earnings Call Summary
Earnings Call Date:Mar 03, 2026
(Q4-2025)
| Next Earnings Date:Jul 24, 2026
Earnings Call Sentiment Neutral
The call balanced clear proactive strategic responses, cost and working capital discipline, and pockets of strong growth (Aerospace/Defense, fire protection) against material near-term challenges: a semiconductor-driven revenue decline, one-off impairments and adjusting items, Thermal Products underperformance under review, and leverage above target. Management provided concrete mitigation actions (simplification benefits, procurement and site optimization, ERP rollout) and 2026 guidance targeting modest revenue growth (1%–2%) and margin recovery to around 10%, indicating stabilization but not yet a full turnaround.Positive Updates
Resilient headline margin and profitability
Headline adjusted operating profit of GBP 99.1m with an adjusted operating margin of 9.6%, showing resilience despite challenging markets; return on invested capital of 14.1% (slightly below through-cycle range).
Negative Updates
Revenue decline driven by semiconductor downturn
Headline revenue GBP 1,030m, down 3.3% on an organic constant currency basis; volume decline ~6.7%; semiconductor revenue decline accounted for around GBP 33m of the fall and was the principal driver of the revenue drop.
Read all updates
Q4-2025 Updates
Positive
Negative
Resilient headline margin and profitability
Headline adjusted operating profit of GBP 99.1m with an adjusted operating margin of 9.6%, showing resilience despite challenging markets; return on invested capital of 14.1% (slightly below through-cycle range).
Read all positive updates
Company Guidance
The company guided that for 2026 it expects organic constant‑currency revenue growth of 1–2%, adjusted operating profit margin to return to around 10%, capital expenditure of ~£50m (c.1.2x depreciation), net finance charge of ~£24m, an effective tax rate of 27–29% and year‑end leverage of c.1.7x (target ongoing leverage 1.0–1.5x, with a plan to bring leverage to ~1.5x over the next two years), while transform activities are expected to deliver net benefits of c.£11m in 2026 and continued margin uplift (simplification and CI delivered c.1.7pp in 2025 and c.£16m in‑year benefits), ERP spend of ~£20m in 2026 (winding down in 2027), pricing running at c.3.5% versus ~5% COGS inflation, and the board will maintain the dividend (12.2p in 2025) until cover recovers to c.2.5x.Morgan Advanced Materials Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
55
Neutral
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 996.60M | 1.10B | 1.11B | 1.11B | 950.50M |
| Gross Profit | 198.30M | 813.20M | 120.80M | 244.70M | 207.10M |
| EBITDA | 210.10M | 150.00M | 138.60M | 188.10M | 156.30M |
| Net Income | 21.10M | 50.30M | 47.30M | 88.00M | 73.80M |
Balance Sheet | |||||
| Total Assets | 984.80M | 1.08B | 1.02B | 1.03B | 925.40M |
| Cash, Cash Equivalents and Short-Term Investments | 126.50M | 118.60M | 124.50M | 117.70M | 127.30M |
| Total Debt | 360.70M | 393.70M | 356.80M | 318.10M | 223.80M |
| Total Liabilities | 635.90M | 687.80M | 626.10M | 602.30M | 575.80M |
| Stockholders Equity | 316.60M | 353.70M | 360.30M | 389.00M | 310.60M |
Cash Flow | |||||
| Free Cash Flow | 53.50M | 17.20M | 18.10M | -37.40M | 74.60M |
| Operating Cash Flow | 120.60M | 113.30M | 78.50M | 20.60M | 106.20M |
| Investing Cash Flow | -55.00M | -86.00M | -60.20M | -57.00M | -13.90M |
| Financing Cash Flow | -99.50M | -33.00M | -2.00M | 23.40M | -112.20M |
Morgan Advanced Materials Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | £7.76B | 33.19 | 13.71% | 1.93% | -31.27% | -13.26% | |
71 Outperform | £1.22B | 31.10 | 33.12% | 1.01% | 24.42% | 103.25% | |
71 Outperform | £7.23B | 29.75 | 24.91% | 1.29% | 4.25% | 29.89% | |
67 Neutral | £2.56B | 22.64 | 20.10% | 2.04% | 3.03% | 13.76% | |
62 Neutral | £1.21B | 22.50 | 8.58% | 3.30% | -3.96% | 192.10% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
55 Neutral | £623.32M | 29.96 | 6.66% | 608.88% | ― | ― |
* Basic Materials Sector Average
GB:BA05
Morgan Advanced Materials
66.50
-12.25
-15.56%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.