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Investing.com -- Shares of Essentra PLC (LSE:LON:ESNT) climbed 1.8% on Wednesday after the company reported a smaller-than-anticipated decline in like-for-like (LFL) sales for the first four months of the year.
The performance, which saw a -1.3% LFL growth, surpassed the forecasted -3% and improved upon the -3.7% seen in the fourth quarter of 2024.
The EMEA region experienced mid-single digit volume declines, showing signs of slowing contraction since the second half of 2024.
Meanwhile, the Americas returned to low-single digit volume growth, and the APAC region sustained its positive mid-single digit volume growth.
Despite the uncertain macroeconomic outlook, Essentra’s outlook for fiscal year 2025 remains unchanged.
The company maintains a balanced approach to cost control, with continued investments in organic growth and evaluation of inorganic opportunities.
Essentra expressed confidence in its medium-term strategic plan and targets, noting that the direct impact of tariffs is expected to be limited due to the majority of its products being made and sold within the same region.
While RBC Capital Markets has left operational assumptions unchanged, they have adjusted their 2025 and 2026 EBITA forecasts down by 3% and EPS by approximately 4%, factoring in foreign exchange rates and the slower pace of share buybacks.
Despite these revisions, RBC reaffirmed their ’Outperform’ rating on Essentra’s stock, citing potential for significant upside from macro recovery, operational leverage, and effective use of the balance sheet.
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