Source: Sharecast
"The company is delivering consistently and, with a new CEO coming in soon, the bottom up story could become more interesting in the months ahead," said Deutsche Bank. "We expect Simon Trott's initial focus to be on simplification, cost reductions and potential smaller asset sales," he said.
DB added that while Rio remains the bank's preferred iron ore major, it sees downside risks to iron ore in the months ahead.
"Valuation multiples are undemanding, but not compelling due to more elevated investment levels (2026 spot EV/EBITDA of circa 5x, FCFy of 6-7%)," added DB-
Analysts at Berenberg lowered their target price on refractory products supplier RHI Magnesita from 4,000p to 4,400p on Thursday following the group's H1 earnings a day earlier.
RHI Magnesita highlighted lower profitability amid a persistently weak industrial backdrop in its H1 earnings, with adjusted underlying earnings down 26% year-on-year at €141m, impacted by deferred industrial projects, volume and pricing pressure affecting margins, and FX headwinds.
Berenberg noted that market conditions "remain difficult" and, as with its peer Vesuvius, passing on pricing in very subdued markets was "challenging", while RHI's product and project mix has exacerbated challenges.
"We believe that the initial share price reaction, down 15% on the day, was harsh on the group; however, there are clear industry challenges that have extended well beyond our and the market's expectations," said the German bank. "That said, considering the group's geographic and product breadth, as well as its cash generation, its valuation is inexpensive at 5.9x EV/EBITDA and a 12.7% FCF yield given where we are in the cycle – we keep our 'buy' rating."
RBC Capital Markets lifted its price target on Bodycote on Thursday to 775p from 650p and reiterated its 'outperform' rating following the company's results a day earlier.
The Canadian bank said Bodycote reported a solid first-half update and full-year outlook and argued that a price-to-earnings of 14x 25E/12x 26E for a business approaching 20% operating margins remains "highly attractive".
"Restructuring is moving ahead of expectations, as is footprint rationalisation," RBC said. "End markets have stabilised in recent months and some sequential uplift is expected in H2."
RBC said it was making limited forecast changes, mainly around FX and restructuring/site rationalisation.
It lifted its price target as it updated its target multiple to 15x - in line with the Bodycote ten-year average - and rolled forward its base year to 2026.
