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07 Apr, 2021 16:20

Berenberg starts off Strix at 'buy'

coffee-cup

Analysts at Berenberg initiated coverage on kettle safety manufacturer Strix Group at 'buy' on Wednesday, branding the stock as "a strong cup of tea".

Berenberg said with a well established and large market share, sector-leading operating margins and "exceptionally high" returns, it thinks Strix has "many attractive characteristics", especially with the company now "rapidly expanding" into adjacent markets – water filtration and other small domestic appliances – which should add substantial scale in the coming years.

The German bank also believes Strix has strong environmental, social and corporate governance credentials, which it said were "arguably currently overlooked" by investors.

"Considering we believe Strix can double revenues on a five-year view, shares appear significantly undervalued at 17x FY 2022 price-to-earnings ratio," said Berenberg, which started the stock off with a 330.0p target price.

"At a 37% discount to peers, we believe shares are mispriced and believe there is a material rerating opportunity as the group delivers its growth ambitions and the ESG story evolves."


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Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.