Hill & Smith Holdings: Strong Financial Position and Growth Potential Justify Buy Rating

In a report released today, David Farrell from Jefferies maintained a Buy rating on Hill & Smith Holdings (HILS – Research Report), with a price target of p2,540.00.

David Farrell has given his Buy rating due to a combination of factors that highlight Hill & Smith Holdings’ strong financial position and future growth potential. The company is on track to meet the consensus EBITA for FY25F, which is a positive sign, especially considering the adverse foreign exchange impact that was worse than initially expected. Despite challenges such as tough comparisons and adverse weather affecting organic revenue growth, the company is expected to benefit from easier conditions moving forward.
Furthermore, Hill & Smith Holdings is experiencing ongoing momentum in margin expansion, and its balance sheet is well-positioned to support additional earnings per share growth through mergers and acquisitions. The company’s trading performance up to April has been positive and aligns with expectations, reinforcing confidence in its ability to achieve the forecasted EBITA. Additionally, the company has not observed any significant market softening in the US, which alleviates some investor concerns. These factors collectively support the Buy rating given by David Farrell.