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On Thursday, Deutsche Bank (ETR:DBKGn) adjusted its price target for Hill & Smith Holdings Plc (HILS:LN), reducing it slightly to GBP25.50 from GBP26.00, while reaffirming a Buy rating on the company’s shares. The adjustment follows Hill & Smith’s announcement of another record year, surpassing expectations due to robust performance in the United States, which now accounts for approximately 76% of the Group’s operating profit.
The company’s margin showed significant improvement, rising to 16.8% from the previous 14.8%, bolstered by a better-than-expected contribution from recent acquisitions. Deutsche Bank’s analysts highlighted Hill & Smith’s fiscal year 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) at £143.5 million, exceeding both their own estimate of £139.4 million and the consensus of £138.6 million. The anticipated earnings per share (EPS) for FY24 are 122.6p, which also surpasses Deutsche Bank’s estimate of 118.3p and the consensus of 117.6p.
The company’s strong trading momentum, particularly in its US and Indian operations, is projected to continue into 2025. The analysts noted that, as of now, trade tensions are not expected to have a significant impact on the company’s performance. This outlook suggests confidence in the ongoing growth and stability of Hill & Smith’s business, despite the adjustment in the price target.
Investors may view the maintained Buy rating as a signal of Deutsche Bank’s continued optimism about Hill & Smith’s prospects, despite the minor revision in the price target. The company’s robust US presence and successful integration of acquisitions appear to be key drivers of this positive outlook.
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