Analyst David Farrell from Jefferies maintained a Hold rating on Morgan Advanced Materials and increased the price target to p220.00 from p210.00.
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David Farrell has given his Hold rating due to a combination of factors affecting Morgan Advanced Materials. The company recently issued a trading update indicating a reduction in its financial expectations for FY25, primarily due to a delay in semiconductor demand and uncertainty in the European industrial markets. These challenges have led to a projected decrease in EBITA consensus by approximately 10%, driven by a downward revision in EBITA margins to around 10%, attributed to cost under-recovery, a weaker sales mix, and foreign exchange impacts.
Despite some stabilization signs in the first half of FY25, the unexpected downgrade and low valuation multiple are likely to negatively impact the share price and investor sentiment. While there is an upcoming Capital Markets Day in December where the new CEO will present his strategy, the fundamental financial figures need to stabilize to attract investor interest. Therefore, the Hold rating reflects the need for caution until these underlying issues are resolved.
Based on the recent corporate insider activity of 28 insiders, corporate insider sentiment is neutral on the stock.