EU and US could reach trade deal this weekend - Reuters
On Wednesday, Deutsche Bank (ETR:DBKGn)'s analysis led to a revised stock price target for Essentra Plc (LON:ESNT:LN), now set at GBP1.80, down from the previous GBP2.00, while the firm maintained a Buy rating on the stock. The adjustment comes in the wake of observed weakness in European markets, which is expected to impact the company's financial performance for the fiscal year 2025. The last closing price of Essentra's stock was reported at 121.40p.
Essentra's financial outlook for fiscal year 2024 anticipates a 2.7% decline in like-for-like (LFL) group revenue, underpinned by varying conditions across different end markets. This projection is slightly more pessimistic than Deutsche Bank's estimate of a 2% decrease. The final quarter of 2024 saw a 3.7% LFL revenue contraction, with regional disparities in trading conditions.
The Europe, Middle East, and Africa (EMEA) region experienced further weakening in the last quarter, with the company's performance closely mirroring manufacturing Purchasing Managers' Index (PMI) trends, especially in Western Europe.
Conversely, the Americas region displayed signs of stabilization during the same period, with distributor volume trends showing no significant changes. Meanwhile, the Asia-Pacific (APAC) region witnessed gradual improvement, bolstered by China's export business.
Essentra's regional gross margins remained stable year-over-year. The company's manufacturing facilities are actively adjusting their capacity to align with the current demand. The firm expects its pre-IFRS 16 net debt to EBITDA ratio for fiscal year 2024 to stay within the targeted range of less than 1.5 times.
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