No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Stifel resumed coverage of Strix on Thursday with a 'buy' rating and a 54p target price, stating the kettlecontrols specialist had stabilised after a difficult period and was now showing early signs of recovery, helped by improving volumes, cost savings and the completion of its recent tender offer.
The American investment bank said Strix's decision to return around 10m of capital to shareholders via the tender offer, alongside the planned restart of its 10m buyback programme, strengthened the stock's investment case and supported its valuation view.
Stifel highlighted improving posttariff volumes in Strix's controls division, noting that the trend had continued through the first three months of the year. It also noted that surcharges to offset higher copper and silver prices had been agreed with most customers, while Strix's consumer division had returned to growth and sharpened its competitive positioning.
It also pointed to Strix's multipronged effort to rebuild momentum, including the rollout of lowcost and next gen Controls, which it said were delivering early success in reclaiming market share.
While rising plastic costs linked to the conflict in the Middle East remained a potential headwind, Stifel said Strix was working to mitigate the impact through efficiencies, surcharges and new product initiatives. With Strix's sale of Billi leaving the group wellfunded and earnings revisions stabilising, Stifel said the stocks valuation looked attractive given the mediumterm recovery potential.
Analysts at Berenberg hiked their target price on telecommunications tower business Helios Towers from 230p to 275p on Thursday after the company released its first quarter results earlier in the day.
Berenberg said Helios had delivered "outstanding tenancy additions", which drove a material adjusted underlying earnings beat in the quarter, and also noted that it had made "a significant upgrade" to its full year expectations for tenancy additions, adjusted EBITDA and recurring free cash flow, as well as a requisite increase in discretionary capex.
"We upgrade our FY26, FY27 and FY28 forecasts for recurring free cash flow by 7%, 4% and 5% respectively," said Berenberg.
The German bank noted that while more tenancy additions will result in a higher discretionary capex spend in FY26, "the significant benefits of the additions" will flow into FY27, FY28 and beyond. It also pointed out that of the 1,000 incremental tenancies implied by the upgrade, Helios now expects to see a $5m benefit to adjusted EBITDA in FY26, but a benefit of "at least $15m" to adjusted EBITDA and recurring free cash flow in FY27, FY28 and beyond.
"We now calculate Helios's incremental ROIC in FY26 to be c20% - well above any reasonable estimate for its cost of capital - and c30% from FY26 to FY30. We emphasise that there is no change to Helios's target of a 2.5x tenancy ratio by FY30," said Berenberg, which reiterated its 'buy' rating on the stock. "Helios trades on 9.1x FY26 EV/EBITDA and a 7.8% RFCF yield."