top of page
  • Writer's pictureMark Watson-Mitchell

Liberum predicts SigmaRoc could double

Construction material company SigmaRoc (SRC) has seen its shares slide but Liberum says the market is ‘overestimating’ the impact of a downturn.

Analyst Charlie Campbell retained his ‘buy’ recommendation and target price of 130p on the stock, which closed down 0.4% at 47.4p on Monday.

He said first half results were ‘strong and in line with guidance’, with earnings up 6% despite ‘rapid raw material cost inflation and halts in some customer activity’.

‘We are confident [pre-tax profits] will grow in the second half, as demand holds up, the UPM strike (at a key customer in Finland) will not repeat, and acquisitions mature,’ said Campbell.

‘The shares are down 58% from 2021 highs, as the market overestimates the sensitivity of profits and cashflows in a potential downturn. We think a 35% fall in profits with a 10% free cashflow decline are serious downturn scenarios.’

He added that a joint venture with Arcelor Mittal is ‘another seal of approval in SigmaRoc’s technical and entrepreneurial abilities’.

‘We see over 100% upside to our unchanged target price,’ he said, meaning the shares could double.

Recent Posts

See All

Hollywood Bowl ‘far too cheap’, says Berenberg

Hollywood Bowl (BOWL) is too cheap considering the ten-pin bowling operator continues to outperform, says Berenberg. Analyst Owen Shirley retained his ‘buy’ recommendation and target price of 350p on


bottom of page