Hunting – tomorrow’s Interims from this precision engineering group will show an advance in its 2030 Corporate Strategy, shares 322p, average brokers TP 604.7p

27.08.2025

On Thursday morning, 28^th August, the £509m-capitalised Hunting (LON:HTG) group will be declaring its Interest Results for the six months to end-June.

Early in July the group gave the market some guidance that its Management remained comfortable with expectations of between $135m to $145m for its full-year EBITDA.

It also noted that it anticipated having a year-end total cash and bank position in the $65m to $75m bracket, accordingly it was proposing a Share Buyback programme, up to $40m in cost.

That is due to start tomorrow, although the group’s Directors reckon that it will take up to 12 months to complete.

Management Comment

"Hunting has taken a significant step forward in the execution of its 2030 Strategy, with the completion of two acquisitions, which will accelerate growth in revenue and EBITDA to the end of the decade.

Both FES and OOR demonstrate strong margin profiles, well in excess of the Group's long-range stated target of 15%.

Our sales order book supports the robust outlook for the Group while our success within our Subsea product group in the Gulf of Mexico and North Sea confirms our strategy of pivoting our sales profile to longer cycle, more stable revenue opportunities.

The first half of 2025 has seen strong trading for the Group.

Hunting's robust cash generation and significant financial flexibility enables us to commence a Share Buyback and increase our targeted annual dividend distributions.

We also continue to actively monitor further bolt-on M&A opportunities."

The Business

Hunting is a global, precision engineering group that provides precision-manufactured equipment and premium services, which add value for its customers.

The company, which was established way back in 1874, maintains a corporate office in Houston and is headquartered in London, whilst also having operations in China, India, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, the UAE and the USA.

It has five main operating product segments - OCTG; Perforating Systems; Subsea; Advanced Manufacturing; and Other Manufacturing.

Hunting is a specialist manufacturer of customised, high-value components typically for the oil & gas industry.

Its chief product lines are perforating guns & associated systems, tubular goods (OCTG) premium connections, subsea, and advanced manufacturing.

Almost all its businesses provide high-performance equipment, typically manufactured to tight tolerances using CNC machine tooling and to a mixture of Hunting and third-party specifications.

Its manufacturing footprint is around 50% in the United States, with the balance widely spread in Europe, Asia & the Middle East.

Buyers for its products include the oil service majors such as Schlumberger, Baker Hughes & Halliburton, with which it also competes, as well as oil companies directly and a wide range of customers in other industries.

These include geothermal and carbon capture, as well as aviation, defence, space, and other specialist capital equipment applications.

Its manufacturing footprint serves these customers worldwide, and hence activity in one region may be used for projects elsewhere in the world.

The Equity

There are some 164.94m shares in issue.

The larger holders include Schroder Investment Management (8.09%), Hunting Investments (6.67%), JP Morgan Asset Management (5.12%), Franklin Mutual Advisers (5.07%), abrdn Investment Management (5.04%), GLG Partners (4.99%), UBS Asset Management (4.90%), Oasis Management (4.74%), Rathbones Investment Management (3.80%), and Orbis Investment Management (3.14%).

Brokers Views

There are some 8 analysts following the group, half of whom rate the shares as a Buy, one looks for them to Outperform, two suggest the shares are a Hold, while the final analyst states no opinion.

The average Target Price of the analysts is 604.7p, the lowest TP is 465p, with the highest being 813.89p.

At Zeus Capital, analyst Daniel Slater rates the group’s shares as a Buy, with a 450p Target Price.

In a recent note on the First Half Trading Update he stated that:

“Overall, this is a strong statement from Hunting, reassuring on full year guidance, showing good order book progress and the benefit of some of its business promotion and cost cutting initiatives, and announcing a significant new shareholder returns programme, demonstrating management’s confidence in the forward delivery from the business.”

For the 2025 year, his estimates are for $1,148m ($1,048m) revenues, with $96.6m ($75.6m) adjusted pre-tax profits, generating $0.39 ($0.31) per share in earnings while paying out a dividend of $0.13 ($0.11) per share.

The end-December 2026 year sees Slater looking for $1,267m sales, $118.1m profits, $0.49 earnings and a $0.147 dividend.

At Canaccord Capital Markets, analyst Alex Brooks rates the group’s shares as a Buy, he is looking for them to rise to 600p.

Brooks estimates sales to end-2025 of $1,091m ($1,049m), EBITDA of $140.0m ($126.3m), creating adjusted earnings of $0.41 ($0.31) per share and paying a dividend of $0.13 ($0.12) per share.

For 2026 the estimates are for $1,250m sales, $180.0m EBITDA, $0.62 of earnings and a $0.15 dividend per share.

“We continue to see Hunting as materially undervalued, trading well below the multiples of directly comparable companies in the UK and US.”

At Equity Development, analysts Andy Edmond and Toby Thorrington have a 347p a share ‘fair value’ on the group’s equity.

Their note suggests that:

“Hunting is hitting its marks strategically whilst also continuing to improve near term profitability.

H1’25 contained operational progress, M&A execution and an updated capital allocation programme to include faster dividend growth and prospective share buybacks.

Prevailing earnings multiples remain unstretched and the prospect of faster dividend growth adds further appeal in our view.”

My View

Having followed this business for so long, decades even, I have never been disappointed with its Management - I really like the Hunting group and rate the shares as a Buy at 322p.

I did note that the Directors reckon that it could take up to a year to complete the $40m Share Buyback programme – whereas I reckon that could be over within months.

Ahead of seeing tomorrow’s results,

I take the view that the shares will be rising again very soon, easily breaking the 400p level, perhaps even up through the 455p peak achieved within the last year.

(Profile 15.03.21 @ 275p set a Target Price of 350p*)

(Profile 12.04.23 @ 240p set a Target Price of 300p*)

Asterisks * denote that Target Prices have been achieved since Profile publication.