Macro recovery offers relief - Berenberg ups Hexpol to 'hold'

Hexpol AB

13/12/2021 09:49

** Berenberg upgrades Hexpol  HPOLb.ST  to "hold" from
"sell," seeing the current macro environment likely to
facilitate the Swedish polymers group's solid performance in
2022 and 2023
    ** "We think the strength of industrial production will
likely trump any raw material and supply chain-related margin
squeeze over the next few quarters," it says
    ** According to the brokerage, a "benign" macroeconomic
backdrop, particularly in the U.S., and a normalisation in raw
material prices should bolster Hexpol's cash flows and operating
performance in 2022 and 2023
    ** However, the broker's main concern over the longer term
remains that Hexpol's dominant rubber compounding division
offers little to no organic growth
    ** Moreover, it says it would need convincing that the
current M&A-fuelled growth can continue over the long term
    ** Out of five analysts that cover Hexpol, two rate the
stock "strong buy", ​two rate it "hold" and one rates it "sell,"
according to Refinitiv data


 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))