Strix Group shares boil over as Liberum starts at 'buy'
Analysts at Liberum initiated coverage of Strix Group, the kettle safety control manufacturer at 'buy', flagging to clients what they believed was a "major" re-rating ahead.
The compound annual growth rate for the company's earnings per share was set to triple over 2021-25, what with the manufacturer now targeting a doubling in its topline as it realigned to higher growth areas.
That compared to a historical EPS CAGR of 3.0%.
Its high market share and "highly" defensive qualities were known to the market.
But in the judgement of analysts Daniel Cunliffe and Christian Hinderaker, Strix's free cash flow was "unique" because of its low maintenance capex and net working capital.
Hence, the EPS CAGR could hit double-digits, driving their anticipated re-rating in the share price.
"We see c.40% upside to the stock as it re-rates towards best-in-class industrials. A unique industrial business set to undergo a meaningful re-rating as growth accelerates."
By the end of trading, Strix Group shares had jumped 8.18%, hitting a new record high at 363.50p.