On Wednesday, JPMorgan updated its financial model for Vesuvius Plc (VSVS:LN) stock, a leading molten metal flow engineering company, resulting in an increased price target. The firm's price target for Vesuvius was raised to £4.90, up from the previous £4.60, while the stock's rating remains at Neutral.
The adjustment follows a review of the company's performance as it approaches the release of its first-half 2024 results. JPMorgan's revisions to its forecasts for Vesuvius are mainly due to foreign exchange considerations.
Recent steel production data for April and May indicated persistent trends from the first quarter, with regions like India and Eastern Europe, the Middle East, and Africa (EEMEA) experiencing robust growth, whereas other areas showed mixed results.
Despite limited consensus expectations for the first half of 2024, JPMorgan's full-year 2024 Trading Profit forecast for Vesuvius is now 2% below the market consensus. Additionally, the firm's projections suggest a 52% second-half weighting for Vesuvius' 2024 results, which is higher than the five-year average of 47%.
This indicates that Vesuvius may have more to accomplish in the second half of the year than usual, which could prompt questions about the company's full-year 2024 guidance and potentially lead to trimmed forecasts.
JPMorgan's analysis is based on conversations with Vesuvius and an evaluation of the latest data points, which include the steel production figures that have been influential in shaping the revised outlook. The financial institution's current stance suggests a cautious approach to Vesuvius' stock, given the challenges and uncertainties that lie ahead in the latter half of the year.
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