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Morgan Advanced Materials
(LSE:MGAM)
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Rating:61Neutral
Price Target:
280.00 p
▲(19.15% Upside)
Action:Reiterated
Date:08/06/26
The score is primarily driven by mixed fundamentals: pressured recent growth/profitability and meaningful leverage are partially offset by improved cash generation. Technically, the trend is constructive (above major moving averages) but near-term indicators look overextended. Valuation is balanced by a high dividend yield against a relatively high P/E, while the latest call supports a cautious-constructive view with modest guidance and progress on margin levers but reliance on a non-recurring H1 benefit and ongoing implementation costs.
Positive Factors
Mission-critical engineered materials
Morgan sells application-specific ceramics, carbon materials and engineered systems for demanding environments, where performance requirements can create customer qualification and design-in advantages. Lifecycle production and replacement demand support recurring revenue and make the business less dependent on transactional commodity sales.
Negative Factors
Declining revenue and earnings
Recent contraction in revenue alongside a sharp earnings decline shows that Morgan's operating base remains exposed to weaker end-market demand and margin pressure. Lower profitability can reduce internal funding for investment and make the company's medium-term improvement plans more dependent on successful execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Mission-critical engineered materials
Morgan sells application-specific ceramics, carbon materials and engineered systems for demanding environments, where performance requirements can create customer qualification and design-in advantages. Lifecycle production and replacement demand support recurring revenue and make the business less dependent on transactional commodity sales.
Read all positive factors
Morgan Advanced Materials (MGAM) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£721.44M
Dividend Yield4.67%
Average Volume (3M)841.05K
Price to Earnings (P/E)39.2
Beta (1Y)1.35
Revenue Growth-5.58%
EPS Growth-32.73%
CountryUK
Employees8,088
SectorIndustrials
Sector Strength72
IndustryIndustrial - Specialties
Share Statistics
EPS (TTM)0.07
Shares Outstanding276,676,420
10 Day Avg. Volume962,448
30 Day Avg. Volume841,047
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 Target
£273.00Price Target Upside16.17% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)0.18
Revenue Forecast (FY)£1.01B
Morgan Advanced Materials Business Overview & Revenue Model
Company Description
Morgan Advanced Materials plc is a UK-based global leader in materials science and advanced engineering solutions. The company develops and manufactures a diverse portfolio of high-performance products. Its extensive range encompasses thermal mana...
How the Company Makes Money
Morgan Advanced Materials primarily makes money by manufacturing and selling engineered materials and components—especially ceramics and carbon-based products—into industrial and technology end-markets. Revenue is generated through: (1) Product sa...
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 Positive
The call presents a constructive operational and strategic update: revenue momentum, meaningful growth in Technical Ceramics and Energy end markets, tangible site turnaround and procurement progress, and clear targets for margin expansion (12% by 2028). However, H1 improvements were partly supported by a non‑recurring GBP 8.9m take‑or‑pay payment and the group still faces specific challenges — equipment issues earlier in the year, restructuring and ERP costs, softer European industrial demand, Performance Carbon weakness ex‑phasing, and modest near‑term free cash generation. On balance, management demonstrates credible execution on multiple strategic levers and measurable operational improvements outweigh current headwinds, while risks remain around non‑recurring items and regional demand softness.Positive Updates
Revenue and Organic Growth
Group revenue GBP 518.0m for H1 2026; organic constant currency growth of 4.8% (includes GBP 8.9m take-or-pay phasing benefit). Excluding the GBP 8.9m take-or-pay item, organic constant currency revenue grew by 3.0%.
Negative Updates
Reliance on One-Off Take-or-Pay Benefit
GBP 8.9m take-or-pay payment from a semiconductor customer materially boosted H1 revenue and added c.160 basis points to margin; this benefit will not repeat in H2 2026, reducing recurring comparability.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Organic Growth
Group revenue GBP 518.0m for H1 2026; organic constant currency growth of 4.8% (includes GBP 8.9m take-or-pay phasing benefit). Excluding the GBP 8.9m take-or-pay item, organic constant currency revenue grew by 3.0%.
Read all positive updates
Company Guidance
Guidance for 2026 reiterated organic constant-currency revenue growth of around 2% for the full year, with second-half adjusted operating margin expected to be broadly in line with H1 excluding a 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% ex‑phasing; take‑or‑pay added ~160bps). Management expects 2026 simplification costs of ~£10m (part of a £45m program delivering £27m annual run‑rate savings), ERP spend of £22–24m in 2026 (program winding down toward end‑2027), capital expenditure of ~£50m in 2026 (weighted to H2) and medium‑term CapEx ~£50m or ~1.2x depreciation; net finance charge ~£24m; effective tax rate 27–29%; year‑end leverage around 1.7x (net debt £253m, ~2x EBITDA at 30 June) moving toward a 1–1.5x target, with positive free cash flow expected by end‑2027; interim dividend held at 5.4p and adjusted EPS in H1 was 10.7p.Morgan Advanced Materials Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
57
Neutral
Cash Flow
68
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 | 212.00M | 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 Technical Analysis
Positive
235.00
Price Trends
252.17
Positive
237.12
Positive
224.82
Positive
Market Momentum
0.73
Positive
50.98
Neutral
52.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:MGAM, the sentiment is Positive. The current price of 235 is below the 20-day moving average (MA) of 265.93, below the 50-day MA of 252.17, and above the 200-day MA of 224.82, indicating a neutral trend. The MACD of 0.73 indicates Positive momentum. The RSI at 50.98 is Neutral, neither overbought nor oversold. The STOCH value of 52.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:MGAM.
Morgan Advanced Materials Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | £6.75B | 21.01 | 32.41% | 1.23% | 7.67% | 45.97% | |
76 Outperform | £4.02B | 33.18 | 21.48% | 1.69% | 2.22% | 25.89% | |
67 Neutral | £1.55B | 26.93 | 9.30% | 2.55% | 1.68% | 111.96% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | £721.44M | 39.19 | 5.79% | 4.67% | -5.58% | -32.73% | |
61 Neutral | £7.39B | 4.29 | 92.97% | 2.29% | -33.55% | 4.29% | |
60 Neutral | £1.10B | 27.64 | 34.20% | 6.70% | ― | ― |
* Industrials Sector Average
GB:MGAM
Morgan Advanced Materials
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67.38
34.80%
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Morgan Advanced Materials Corporate Events
Executive/Board ChangesRegulatory Filings and Compliance
Morgan Advanced Materials Discloses Share Option Grant to Senior Executive
Neutral
Sep 29, 2026
Morgan Advanced Materials has disclosed a share option grant to Group General Counsel Paul Boulton under the company’s U.K. Save As You Earn scheme, in line with regulatory requirements. The grant covers 4,789 ordinary shares at an option pr...
Business Operations and StrategyM&A Transactions
Morgan Advanced Materials Sells Foseco India Stake to Cut Debt
Positive
Aug 28, 2026
Morgan Advanced Materials has completed the disposal of its entire 15% stake in Foseco India Limited, selling 1.2 million shares for gross proceeds of about INR 6,530 million. The FIL shares had been received as part of the consideration for the e...
Business Operations and StrategyFinancial Disclosures
Morgan Advanced Materials Schedules Live Investor Presentation on Half-Year Results
Positive
Aug 6, 2026
Morgan Advanced Materials has announced that Group CEO Damien Caby and Group CFO Richard Armitage will host a live investor presentation on 18 August 2026 to discuss the company’s half-year results. The event, conducted via the Investor Meet...
Business Operations and StrategyFinancial Disclosures
Morgan Advanced Materials posts steady H1 as simplification drive and strategic review gather pace
Positive
Aug 6, 2026
Morgan Advanced Materials reported first-half 2026 results broadly in line with expectations, with organic constant-currency revenue up 4.8% to £518.1m and an adjusted operating margin of 11.2%, helped by a one-off £8.9m phasing benefit ...
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.