Hexpol: Berenberg says 'time to take profits' and starts with 'sell'

Hexpol AB

26/02/2021 09:53

** Berenberg initiates Swedish polymers group Hexpol
 HPOLb.ST  with a "sell" rating and price target of SEK 84
    ** "All mixed up; time to take profits", the brokerage says,
adding why pay 13x EV/EBITDA for a company that has generated no
organic growth over the last few years and is next in line for a
big margin squeeze
    ** At 0904 GMT, Hexpol's shares down 5.39% at SEK 93.05; one
of the bottom performers on the pan-European STOXX 600  .STOXX  
    ** Berenberg expects raw material price inflation will
burden a core business generating lacklustre organic sales
growth and to pressure margins in the next two years
    ** Sceptical Hexpol will outperform the 3%-4% p.a. organic
growth of its end-markets due to weaker mix 
    ** Also predicts that a slowdown in inorganic growth could
make achieving Hexpol's 10% p.a. sales growth target difficult


 ((marta.frackowiak@thomsonreuters.com))