Analysts at Liberum raised their target price on high performance polymers supplier Victrex from 2,300.0p to 2,800.0p on Thursday, stating that while a full recovery still appeared to by two years away, a special dividend now seemed “likely” in 2021.
Liberum updated its earnings estimates for Victrex by 12% following a better than expected recovery in the firm’s end markets since its last model rework earlier in the year.
The broker, which reiterated its ‘hold’ rating on the stock, also stated it believes that this fiscal year the company will end with £90.0m of cash on its balance sheet, triggering a special dividend payment. However, it noted that this was “not in consensus”.
“Despite this, we do not expect the business to stage a full recovery until FY23, as mix, currency and raw material inflation weigh on FY22 gross margin,” said Liberum. “This, coupled with still slow mega-programme conversion, prevents us from taking a more positive stance on the shares at this stage.”
