Liberum Capital reckons that the outlook for Trifast is still positive
The 2022 outlook is still upbeat for Trifast (LON:TRI), however the bolts, nuts, screws and washers manufacturer is facing pressures due to its ongoing supply-side constraints and increasing costs.
Analyst Christian Hinderaker confirmed his ‘buy’ rating but reduced his price objective on the shares from 260p to 220p.. They closed the week at 124p.
Trifast has reiterated its 2022 outlook despite ongoing supply-side challenges and the company said ‘raw materials, freight costs, and lead times are stabilising’.
Hinderaker considers that with just one month to year-end, he now sees sales and earnings converging towards consensus,
‘We therefore reduce our 2022 sales and pre-tax profit estimates by 1% and 5%. With price increases to come, our new 2023 earnings are still 14% above street [consensus] and we still see double-digit margin potential medium term.’
He lowered his price objective because of the global supply headwinds requiring the group to invest further into its inventories. In turn that could lead to a potential reduction of the group’s near-term budget for mergers and acquisitions.