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Canaccord Genuity lowers target price on Flowtech Fluidpower
(Sharecast News) - Canaccord Genuity lowered its target price on industrial supplies firm Flowtech Fluidpower from 130p to 100p on Wednesday, even as it said the group was "unlocking European growth".
Flowtech agreed to acquire pneumatics specialist Q Plus for roughly £8m as it takes its first steps to scale in "a large, fragmented" European market. Valued at what Canaccord Genuity called "an attractive 4.6x LTM EBITDA", the deal will be funded by a £9.6m equity raise that the Canadian bank also said would support deleveraging.
However, while Canaccord noted that the acquisition was "mid-teens accretive on a standalone basis", it also said the net impact on its FY26/27 underlying earnings estimates was "broadly neutral" after incorporating "a more cautious UK outlook", where it noted that self-help measures were driving positive margin momentum but market conditions remain challenging.
"Our TP moves to 100p (from 130p) based on 0.7x EV/Sales, in line with peer median. At 100p, Flowtech would trade on 10x EV/EBITDA for CY26E falling to 8.5x for CY27E which reflects the strength of Flowtech's European growth opportunity, in our view," said Canaccord, which reiterated its 'buy' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com
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