Want to see GB:BA05 full AI Analyst Report?
Top Page
Morgan Advanced Materials
(LSE:BA05)
Select Model
Select Model
Rating:52Neutral
Price Target:
67.00 p
▼(-14.92% Downside)
Action:Reiterated
Date:08/06/26
The score is primarily held back by weak technical momentum and an unattractive valuation profile (high P/E with a dividend yield figure that is not reliable/supportive as provided). Financial performance is mixed—stronger recent cash generation helps, but the sharp profit decline and moderate leverage are key risks. Earnings call commentary is balanced: modest growth guidance and a credible margin-improvement plan are offset by one-off support in H1 results and sizable near-term cost headwinds.
Positive Factors
Diversified high-performance products
A diversified portfolio of engineered carbon and technical-ceramic components supplies multiple end markets with long qualification cycles and high switching costs. This business model supports recurring aftermarket revenue and reduces reliance on any single cyclical sector, aiding stable mid-term earnings.
Negative Factors
Moderate-to-elevated leverage
Leverage above equity and net-debt multiples near management targets constrain financial flexibility. Elevated debt limits ability to absorb demand shocks, fund restructuring and ERP spend, and increases sensitivity to cash-flow volatility while management executes margin and turnaround plans.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified high-performance products
A diversified portfolio of engineered carbon and technical-ceramic components supplies multiple end markets with long qualification cycles and high switching costs. This business model supports recurring aftermarket revenue and reduces reliance on any single cyclical sector, aiding stable mid-term earnings.
Read all positive factors
Morgan Advanced Materials (BA05) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£682.74M
Dividend Yield827.07%
Average Volume (3M)0.00
Price to Earnings (P/E)37.1
Beta (1Y)0.19
Revenue GrowthN/A
EPS GrowthN/A
CountryUK
Employees8,100
SectorBasic Materials
Sector Strength58
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.07
Shares OutstandingN/A
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio-0.50
Price to Book (P/B)1.93
Price to Sales (P/S)0.61
P/FCF Ratio11.39
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Morgan Advanced Materials Business Overview & Revenue Model
Company Description
Morgan Advanced Materials PLC is a British enterprise specializing in the production of a diverse portfolio of advanced, high-performance materials. Its extensive product catalog encompasses high-temperature insulation, engineered to minimize ener...
How the Company Makes Money
Morgan Advanced Materials makes money primarily by selling engineered advanced-material components and systems to industrial and OEM customers. Its revenue model is centered on (1) manufacturing and selling proprietary products made from carbon-ba...
Morgan Advanced Materials Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 26, 2027
Earnings Call Sentiment Neutral
The call balanced clear operational and commercial progress with a number of near-term headwinds. Positive elements include revenue momentum, strong performance in Technical Ceramics, tangible site turnaround metrics (reduced lead times and sales gains), procurement and simplification plans, and a path to the 12% margin target by 2028. However, the H1 results were materially supported by a one-off GBP 8.9m take-or-pay payment, underlying margin remains below target, there are ongoing restructuring and ERP costs, soft European industrial demand and some operational setbacks in Thermal. Management provided concrete initiatives and guidance to address these issues and expects improving leverage and positive free cash flow by end-2027, but near-term growth is modest (c. 2% FY organic growth). Overall, positives and negatives are both substantive and roughly balanced.Positive Updates
Revenue Growth (H1 2026)
Group revenue of GBP 518.0m, up 4.8% on an organic constant currency basis. Excluding a GBP 8.9m take-or-pay phasing benefit, revenue grew 3.0% on a constant currency basis.
Negative Updates
One-off Take-or-Pay Benefit
GBP 8.9m phasing benefit from a take-or-pay arrangement with a semiconductor customer materially boosted H1 revenue and added ~160 basis points to margin; this benefit will not repeat in H2, and management adjusted underlying growth metrics to exclude it.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth (H1 2026)
Group revenue of GBP 518.0m, up 4.8% on an organic constant currency basis. Excluding a GBP 8.9m take-or-pay phasing benefit, revenue grew 3.0% on a constant currency basis.
Read all positive updates
Company Guidance
The management reiterated full-year 2026 guidance of around 2% organic constant‑currency revenue growth and said H2 adjusted operating margin should be broadly in line with H1 excluding the one‑off £8.9m take‑or‑pay phasing benefit (H1 revenue £518m; H1 headline adjusted operating profit £57.8m; H1 adjusted margin 11.2% or 9.6% excluding the £8.9m), and reaffirmed the goal of 12% operating margin by 2028 (and 14% thereafter). Near‑term financial guidance includes simplification costs of ~£10m in 2026, ERP spend of £22–24m in 2026 (program winding down toward end‑2027), capital expenditure ~£50m in 2026 (weighted to H2) and ~£50m/1.2x depreciation for the next 3 years, a net finance charge of ~£24m, an effective tax rate of 27–29%, year‑end leverage c.1.7x (net debt £253m at H1 = 2x EBITDA; target 1–1.5x), and positive free cash flow expected by end‑2027; interim dividend held at 5.4p.Morgan Advanced Materials Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
55
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 992.10M | 996.60M | 1.10B | 1.11B | 1.11B | 950.50M |
| Gross Profit | 87.50M | 198.30M | 813.20M | 120.80M | 244.70M | 207.10M |
| EBITDA | 130.10M | 210.10M | 150.00M | 138.60M | 188.10M | 156.30M |
| Net Income | 18.40M | 21.10M | 50.30M | 47.30M | 88.00M | 73.80M |
Balance Sheet | ||||||
| Total Assets | 1.05B | 984.80M | 1.08B | 1.02B | 1.03B | 925.40M |
| Cash, Cash Equivalents and Short-Term Investments | 153.10M | 126.50M | 118.60M | 124.50M | 117.70M | 127.30M |
| Total Debt | 405.80M | 360.70M | 393.70M | 356.80M | 318.10M | 223.80M |
| Total Liabilities | 697.60M | 635.90M | 687.80M | 626.10M | 602.30M | 575.80M |
| Stockholders Equity | 319.10M | 316.60M | 353.70M | 360.30M | 389.00M | 310.60M |
Cash Flow | ||||||
| Free Cash Flow | 54.80M | 53.50M | 17.20M | 18.10M | -37.40M | 74.60M |
| Operating Cash Flow | 94.70M | 120.60M | 113.30M | 78.50M | 20.60M | 106.20M |
| Investing Cash Flow | -28.80M | -55.00M | -86.00M | -60.20M | -57.00M | -13.90M |
| Financing Cash Flow | -46.40M | -99.50M | -33.00M | -2.00M | 23.40M | -112.20M |
Morgan Advanced Materials Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | £7.20B | 22.22 | 32.41% | 1.16% | 7.67% | 45.97% | |
76 Outperform | £3.94B | 32.52 | 21.48% | 1.72% | 2.22% | 25.89% | |
69 Neutral | £7.38B | 33.34 | 13.71% | 1.82% | -31.27% | -13.26% | |
67 Neutral | £1.61B | 27.90 | 9.30% | 2.42% | 1.68% | 111.96% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | £1.51B | 37.90 | 34.20% | 4.05% | 24.42% | 103.25% | |
52 Neutral | £682.74M | 37.09 | 5.79% | 827.07% | ― | ― |
* Basic Materials Sector Average
GB:BA05
Morgan Advanced Materials
66.50
-12.25
-15.56%
GB:BOY
Bodycote
948.50
309.47
48.43%
GB:GDWN
Goodwin
20,050.00
9,888.01
97.30%
GB:IMI
IMI plc
3,044.00
784.92
34.74%
GB:ROR
Rotork plc
484.20
140.58
40.91%
GB:SMIN
Smiths Group plc
2,567.00
231.77
9.92%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.