Berenberg raises target price on Zotefoams

(Sharecast News) - Analysts at Berenberg hiked their target price on polymer foams manufacturer Zotefoams from 540p to 590p on Tuesday after the group's 22 January trading update revealed that both full-year revenue and adjusted pre-tax profits were expected to be ahead of market expectations. Zotefoams reported good revenue growth across both the Europe, Middle East and Africa, and North America regions, with EMEA benefitting from a strong year in the consumer and lifestyle division, while its North American performance was underpinned by a strong performance in transport and smart Technologies.

Asia, on the other hand, saw headwinds, although Berenberg noted that this region represents only 2% of group revenues and was mainly focused on the construction and other industrial end-market.

The German bank updated its forecasts to include Zotefoams' recent acquisition of OKC, an "innovative foam producer" based in Spain, and a small underlying upgrade based on the improved trading.

"We maintain our conservative view on footwear growth in FY26, after strong growth in FY25. We view the moderating demand in footwear to be helpful for Zotefoams given the complex manufacturing transition the company is making from the UK to Vietnam this year," said Berenberg, which reiterated its 'buy' rating on the stock.

"We remain confident in management's medium-term strategy to grow Zotefoams both organically and inorganically. The OKC acquisition, along with growth in areas aside from consumer and lifestyle, is further evidence of management's thoughtful approach to growing revenue. Zotefoams trades on an FY26 P/E of 9.7x and EV/EBIT of 8.9x."

Reporting by Iain Gilbert at Sharecast.com