Berenberg hikes target price on Victoria following trading update
Analysts at Berenberg raised their target price on flooring manufacturer Victoria from 770.0p to 1,000.0p on Monday, stating the group was "trading well" and "ready" for mergers and acquisitions.
Berenberg updated its numbers for Victoria to reflect its recent trading update and the completion of various refinancing actions taken in recent weeks, noting that with "significant capital" now raised but as yet unspent, future acquisitions would likely be financed from cash already on the balance sheet.
The German bank highlighted that over the coming months and years, it expects Victoria to return to significant M&A, with the company suggesting recently it has the capacity to acquire up to £100.0m EBITDA.
Berenberg also pointed out that given the "significant challenges" faced during the year, Victoria had benefited from a focus on strong cash flow management, quick remobilisations with strong service levels post-various lockdowns that supported market share gains, and the benefits of investment in logistics and manufacturing showing through in margin improvements.
"Trading has been incredibly resilient during the Covid-19 lockdowns, in our view," said the analysts, who also reiterated their 'buy' rating on the stock.