Berenberg raises target price on Elementis
Analysts at Berenberg raised their target price on diversified chemicals group Elementis from 100.0p to 145.0p on Thursday, stating that independence was the "surest path to value".
Berenberg said one of the benefits of the last few weeks' rally in the shares of cyclical companies was that it enabled an "altogether more realistic assessment" of the value of names like Elementis.
The German bank said multiples for comparable companies had all rallied heavily, and the pick-up in automotive and industrial lead indicators bode well for the chromium and talc segments in particular.
Berenberg highlighted that the organic de-levering story of the next two to three years was the most likely path to value creation for Elementis shareholders, in its view.
The analysts also noted that they do not believe a deal with Mineral Technologies will take place and added they suspect that Mineral is "well aware" Elementis share are undervalued if it de-levers.
"In contrast to many cyclicals, shares remain 37% below their highs at the start of the year," added Berenberg, which also reiterated its 'buy' rating on the stock