Broker tips: Strix, Arrow Exploration, Primary Health Properties

(Sharecast News) - Analysts at Berenberg lowered their target price on kettle controls manufacturer Strix from 85p to 75p on Thursday following the group's trading update a day earlier, but said it continues to consider its valuation "attractive" given the medium-term outlook for the business.

Strix's update revealed chief executive Mark Bartlett will be stepping down from the role and also highlighted that its three divisions had continued to experience a "mixed trading environment". As a result, Berenberg made changes to its model based on the trading environment, resulting in a 12% cut to its earnings per share forecasts.

The German bank said Strix's Billi unit maintained strong momentum into the second half, delivering doubledigit growth at constant exchange rates as its international rollout gained traction with new customers in key markets, while its consumer goods division also continued to perform well, supported by the launch of global baby brand products and other new items as planned.

Meanwhile, Berenberg noted that trading pressures in Strix's controls division, which weighed on firsthalf performance, began to ease in the third quarter, stating that conditions had partially stabilised, with early signs of improvement emerging in the fourth quarter. However, Berenberg added that management had anticipated a quicker rebound in the second half, which ultimately did not materialise.

"We cut our EPS forecast for FY 2026 by 12% due to the mentioned market headwinds. We take a conservative stance for FY 2027 and FY 2028 given our understanding of the business," said Berenberg.

"While the trading environment continues to be difficult for the Controls division, the successes seen in both Billi and Consumer Goods are positive, in our view. At a FY 2026 6.2x P/E and 6.1x EV/EBIT, we believe Strix's shares remain cheap."

Canaccord Genuity slightly lowered its target price on Arrow Exploration from 25p to 22p on Thursday but reiterated its 'speculative buy' rating on the stock, highlighting significant investment in its Tapir licence in Colombia.

Canaccord Genuity noted that Arrow had directed $38m of spending in the first nine months of 2025 towards drilling, water handling upgrades, infrastructure improvements and 3D seismic work, with two rigs active during the second and third quarters. The investment was aimed at supporting longerterm production and underpins expectations of a licence extension beyond its current 2028 expiry.

Nearterm, the spending has weighed on cash balances, which fell to $6m at the end of the third quarter from $19m at yearend 2024. However, Canaccord noted cash had already improved to $8m at the start of November and projected around $10m by yearend 2025. The firm also has no debt and retains access to an undrawn $20m loan facility.

Looking ahead, the Canadian bank expects cash growth in 2026, though the pace will depend on oil prices, field performance, reduced capex, exploration success at the Icaco prospect, and potential horizontal drilling.

Incorporating thirdquarter results, Canaccord trimmed production forecasts but said Arrow's producing asset value of 11p underpinned the current valuation, giving investors "free" exposure to potential upside from Tapir and exploration prospects.

Shore Capital has reiterated its 'buy' rating for Primary Health Properties, saying the primary healthcare-focused real estate group was a "clear winner" from new NHS investments announced in this week's Budget.

The NHS has been highlighted as a key beneficiary from the increased investment to be funded from the higher taxes unveiled by chancellor Rachel Reeves on Wednesday.

"The publication over the summer of a ten-year plan for the NHS pivots on three key points: bringing increased provision of care into the community via the establishment of Neighbourhood Health Centres; increasing the utilisation of digitalisation within the NHS; and moving the emphasis from cure to prevention," Shore Capital said in a research note on Thursday. "This all aligns well to us with PHP's portfolio positioning and, in our view, should be supportive for the wider growth ambitions in the sub sector."

Meanwhile, the broker hailed the recent news of the CMA clearing PHP's takeover of Assura, with PHP now well positioned to partner with the NHS in its delivery of new primary health facilities.

"[The merger] now creates a new powerhouse primary healthcare REIT in the British Isles with a portfolio value of c.�6bn and c.1,100 assets - capable of benefiting shareholders with increased scale, synergies and positive operational gearing," the broker said.