In a report released today, Andrew Douglas from Jefferies maintained a Hold rating on TT Electronics, with a price target of p95.00.
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Andrew Douglas has given his Hold rating due to a combination of factors surrounding the recent offer for TT Electronics by Cicor. The offer, which values TT Electronics at 155p per share, includes a mix of cash and shares, and represents a significant premium over the previous closing price. However, the cash/share mix might not be entirely favorable, especially considering that a higher all-cash offer was previously rejected by TT’s board.
Despite these concerns, Douglas views the offer as fair given the challenges TT Electronics faces, such as its insufficient scale impacting growth and profitability, and the uncertain macroeconomic environment. The proposed merger with Cicor would result in a larger entity with a strong global presence in the EMS sector, potentially leading to improved financial metrics and strategic positioning. Therefore, the Hold rating reflects a balanced view of the potential benefits and existing challenges.