Canaccord Genuity hikes Victrex price target following CMD

(Sharecast News) - Canaccord Genuity lifted its target price for Victrex on Tuesday, raising it from 725p to 1,050p, as it said last week's capital markets day had set out a clearer, more disciplined strategy for the polymer specialist.

The broker said the CMD marked a "backtobasics" reset, with management halving the company's dividend, outlining what had gone wrong in recent years, and presenting a focused plan to improve returns. Key themes included scaling back noncore and lossmaking activities, tightening operational discipline, and highlighting very low UK capacity utilisation, which implies limited need for further investment in the near term.

Canaccord said the strong share price reaction suggested investors were supportive of the new direction and highlighted that Victrex's renewed emphasis on core strengths should underpin more realistic mediumterm expectations.

The Canadian bank, which reiterated its 'buy' rating on the stock, also noted that the group's ambition of a 4% to 7% compound annual growth rate compares with just 0.1% over the past decade.

Canaccord said opportunities remain significant across aviation, medical, automotive, electronics, energy and industrial markets, though Victrex now plans to pursue incremental penetration rather than large "moonshot" programmes. Forecast changes reflect both the recent preclose update and more conservative CMD assumptions, resulting in a 5% uplift to FY26/27 earnings per share but a 14% cut to FY28.

Reporting by Iain Gilbert at Sharecast.com