Bodycote (BOY) AI Stock Analysis

• Market Cap: £1.28B
• Dividend Yield: 3.3%
• Average Volume (3M): 255.24K
• Price to Earnings (P/E): 46.8
• Beta (1Y): 1.71
• Revenue Growth: -6.95%
• EPS Growth: -52.08%
• Country: UK
• Employees: 4,379
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 0.21
• Shares Outstanding: 173,332,520
• 10 Day Avg. Volume: 316,094
• 30 Day Avg. Volume: 255,238
• PEG Ratio: -0.78
• Price to Book (P/B): 1.77
• Price to Sales (P/S): 1.56
• P/FCF Ratio: 14.34
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £822.50
• Price Target Upside: 10.77% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: 813.00p ▲(9.49% Upside)

Bodycote's overall stock score reflects a mix of financial performance challenges and positive corporate strategies. The company's financials show pressure on profitability and increased leverage, but strong cash flow generation provides a buffer. Technical indicators suggest positive momentum, though caution is warranted due to potential overbought conditions. Valuation appears high, but corporate events such as restructuring and share buybacks are positively impacting market sentiment.

Positive Factors

Market position & OEM relationships

Bodycote's deep OEM partnerships and global footprint underpin repeat contractual demand across aerospace, automotive, energy and medical. This B2B positioning supports durable revenue streams, long lead relationships and barriers to entry from technical certification and proximity to customers.

Free cash flow generation

Consistently strong free cash flow provides lasting financial flexibility to fund capex, reshaping operations, pay down debt or execute buybacks. Even with a modest decline, robust cash conversion supports strategic investments and cushions the business through cyclical downturns.

Operational margin resilience

A near-25% EBITDA margin signals structural operational efficiency in thermal processing, reflecting scalable facility utilization and technical know-how. Durable EBITDA performance supports reinvestment, pricing power and cash generation even when top-line growth is muted.

Negative Factors

Revenue & EPS decline

Falling revenue and a steep EPS decline indicate weakening demand or pricing pressure in core markets. Sustained top-line and earnings deterioration undermines long-term cash flow expectations, reduces room for strategic investment and heightens execution risk if recovery lags.

Rising leverage and collapsing ROE

Higher leverage alongside a sharp ROE drop diminishes financial flexibility and raises solvency risk if earnings remain depressed. The shift constrains ability to invest organically or pursue M&A without further balance sheet strain and increases sensitivity to demand shocks.

Profitability compression at net/EBIT level

Severe compression of net and EBIT margins suggests structural cost or pricing issues that could persist across cycles. If operating leverage worsens, the company may need sustained restructuring, price adjustments, or capital intensity reductions to restore durable profitability.

Bodycote Business Overview & Revenue Model

Company Description

Bodycote plc provides heat treatment and thermal processing services worldwide. The company operates in two Aerospace, Defence & Energy; and Automotive & General Industrial segments. It offers heat treatment services, including altering the microstructure of metals and alloys, such as steel and aluminum to impart properties comprising surface hardness, temperature resistance, ductility, and strength; metal joining services consisting of electron beam welding, HIP diffusion bonding, hydrogen brazing, induction brazing, and vacuum and honeycomb brazing; and hot isostatic pressing (HIP) services, including isostatic pressing and HIP supporting services, as well as Powdermet technology, a manufacturing process used in the production of complex components using powder metallurgy. The company also provides surface technologies, which are used to prolong the working life of components and protect from environmental factors, such as corrosion and abrasion. Its surface technologies include anodizing, ceramic, flame and combustion spraying, high velocity oxygen fuel, plasma spray, electric arc spraying, aluminide coatings, liquid coatings, and thermo-chemically formed ceramic coatings to enhance corrosion protection and wear resistance. The company serves automotive, aerospace and defense, energy, and general industrial markets. Bodycote plc was founded in 1923 and is headquartered in Macclesfield, the United Kingdom.

How the Company Makes Money

Bodycote generates revenue primarily through its extensive range of thermal processing services. The company operates on a business-to-business model, charging customers for services that improve the mechanical properties and performance of their metal components. Key revenue streams include heat treatment services, which are essential for industries like aerospace and automotive, as well as surface technology services that provide corrosion resistance and wear resistance. Bodycote has established significant partnerships with major manufacturers and original equipment manufacturers (OEMs), which helps secure long-term contracts and repeat business. Additionally, the company benefits from its global presence, allowing it to tap into diverse markets and industries, thus enhancing its earnings potential.

Bodycote Financial Statement Overview

Summary

Bodycote's financial performance shows mixed results. The income statement reflects revenue and profitability pressures, though EBITDA margins remain solid. The balance sheet shows increased leverage, which may elevate financial risk if earnings pressures persist. Cash flow performance is strong, demonstrating good cash generation capabilities, but declining profitability could impact future cash flows. Strategic focus on cost control and revenue growth is essential to improve performance metrics.

Income Statement

The company's revenue has seen fluctuations, with a notable decline from 2023 to 2024. Gross profit margin decreased from 13.5% in 2023 to 14.4% in 2024. Net profit margin also declined from 10.7% to 2.6%. The EBIT margin dropped significantly, indicating pressure on operating profits. However, the EBITDA margin remains strong at 24.9% in 2024, suggesting solid operational cash generation despite revenue pressures.

Balance Sheet

The debt-to-equity ratio increased from 0.12 in 2023 to 0.23 in 2024, reflecting higher leverage which could pose risks if profitability remains pressured. The equity ratio is stable, indicating a strong equity position relative to total assets. Return on equity fell sharply, from 10.8% in 2023 to 3.0% in 2024, due to declining net income, which may concern investors.

Cash Flow

Free cash flow generation remains strong, despite a decline from 2023. The operating cash flow to net income ratio is robust, indicating efficient cash conversion. However, the free cash flow to net income ratio has decreased, which could signal increased capital expenditures or reduced profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	727.10M	757.10M	802.50M	743.60M	615.80M	598.00M
Gross Profit	100.50M	109.30M	108.10M	269.70M	225.70M	186.90M
EBITDA	176.80M	124.00M	201.70M	186.60M	167.70M	97.00M
Net Income	28.40M	20.00M	85.60M	73.70M	59.50M	400.00K
Balance Sheet
Total Assets	1.05B	1.07B	1.14B	1.17B	1.07B	1.11B
Cash, Cash Equivalents and Short-Term Investments	20.20M	19.10M	45.20M	37.20M	39.30M	30.70M
Total Debt	190.50M	150.90M	96.90M	136.60M	156.20M	128.80M
Total Liabilities	406.70M	397.50M	344.40M	385.70M	384.40M	428.60M
Stockholders Equity	639.40M	668.10M	790.80M	780.90M	684.70M	680.50M
Cash Flow
Free Cash Flow	70.40M	82.50M	109.20M	70.10M	87.10M	74.50M
Operating Cash Flow	146.70M	152.60M	191.60M	137.10M	139.10M	134.40M
Investing Cash Flow	-64.20M	-112.80M	-71.20M	-62.30M	-104.80M	-124.70M
Financing Cash Flow	-74.40M	-67.60M	-110.20M	-82.80M	-30.30M	-6.30M

Bodycote Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 742.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BOY, the sentiment is Positive. The current price of 742.5 is above the 20-day moving average (MA) of 706.93, above the 50-day MA of 658.28, and above the 200-day MA of 600.52, indicating a bullish trend. The MACD of 20.35 indicates Negative momentum. The RSI at 76.84 is Negative, neither overbought nor oversold. The STOCH value of 90.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:BOY.

Bodycote Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GDWN	73 Outperform	£1.75B	44.13	35.23%	1.01%	24.42%	103.25%
SPX	72 Outperform	£5.24B	32.21	14.19%	2.46%	0.10%	-15.33%
AVG	70 Outperform	£170.62M	25.98	5.87%	1.02%	14.49%	76.33%
BOY	69 Neutral	£1.28B	46.76	4.10%	3.30%	-6.95%	-52.08%
MGAM	67 Neutral	£638.20M	23.33	8.04%	4.87%	-7.30%	-59.71%
CGS	65 Neutral	£120.43M	24.95	3.82%	6.69%	-13.30%	-60.03%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Bodycote Corporate Events

Bodycote Announces Divisional Restructuring to Enhance Optimise Programme

Bodycote has announced a new divisional reporting structure as part of its expanded Optimise programme, which now includes 30 plants. This restructuring aims to deliver a profit benefit of at least £15 million by mid-2027, with a net cash cost of £10-15 million. The reclassification of additional plants as Non-Core is expected to enhance operational efficiency and financial performance, impacting the company’s future reporting and potentially its market positioning.

The most recent analyst rating on (GB:BOY) stock is a Hold with a £632.00 price target. To see the full list of analyst forecasts on Bodycote stock, see the GB:BOY Stock Forecast page.

Bodycote Reports Modest Growth Amid Strategic Optimisation Efforts

Bodycote reported a modest organic revenue growth of 2.2% in its core business for the four-month period ending October 2025, despite challenges in the Automotive and Industrial sectors. The company is progressing with its Optimise programme, including the sale of 10 French sites and plant closures, which is expected to enhance operational efficiency and profitability. Strong growth in the Aerospace & Defence sector and strategic investments in Precision Heat Treatment and HIP capacity are anticipated to drive future growth, with a focus on improved operational execution and potential acquisitions.

The most recent analyst rating on (GB:BOY) stock is a Hold with a £632.00 price target. To see the full list of analyst forecasts on Bodycote stock, see the GB:BOY Stock Forecast page.