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(Sharecast News) - Analysts at Berenberg lowered their target price on kettle controls manufacturer Strix from 85p to 75p on Thursday following the group's trading update a day earlier, but said it continues to consider its valuation "attractive" given the medium-term outlook for the business.
Strix's update revealed chief executive Mark Bartlett will be stepping down from the role and also highlighted that its three divisions had continued to experience a "mixed trading environment". As a result, Berenberg made changes to its model based on the trading environment, resulting in a 12% cut to its earnings per share forecasts.
The German bank said Strix's Billi unit maintained strong momentum into the second half, delivering double‑digit growth at constant exchange rates as its international rollout gained traction with new customers in key markets, while its consumer goods division also continued to perform well, supported by the launch of global baby brand products and other new items as planned.
Meanwhile, Berenberg noted that trading pressures in Strix's controls division, which weighed on first‑half performance, began to ease in the third quarter, stating that conditions had partially stabilised, with early signs of improvement emerging in the fourth quarter. However, Berenberg added that management had anticipated a quicker rebound in the second half, which ultimately did not materialise.
"We cut our EPS forecast for FY 2026 by 12% due to the mentioned market headwinds. We take a conservative stance for FY 2027 and FY 2028 given our understanding of the business," said Berenberg.
"While the trading environment continues to be difficult for the Controls division, the successes seen in both Billi and Consumer Goods are positive, in our view. At a FY 2026 6.2x P/E and 6.1x EV/EBIT, we believe Strix's shares remain cheap."
Reporting by Iain Gilbert at Sharecast.com
