Jefferies analyst David Farrell maintained a Buy rating on Hill & Smith Holdings (HILS – Research Report) today and set a price target of p2,460.00.
David Farrell has given his Buy rating due to a combination of factors that highlight the potential for Hill & Smith Holdings to perform well in the near future. The recent trading update indicates a positive shift towards organic revenue growth, with a reported 2% increase over the four-month period from July to October. This growth has been primarily driven by the strong performance in the US galvanizing sector, which saw a significant 13% rise in volume, suggesting an uptick in workload and demand.
Despite some ongoing challenges in the Roads & Security division, the unchanged FY24 guidance reflects confidence in the company’s overall resilience and future prospects. The market’s initial concerns about a potential US slowdown impacting Hill & Smith’s financials were alleviated, bolstered by the robust galvanizing results. The appointment of a new CEO, Rutger Helbing, and his commitment to addressing the weaknesses in the Roads & Security business, is seen as a positive step towards enhancing the company’s margins and return on invested capital, potentially leading to a re-rating of the stock.
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Hill & Smith Holdings (HILS) Company Description:
Hill & Smith Holdings PLC caters to engineering and construction company requirements. Its operating segments include Infrastructure – Roads, Infrastructure – Utilities and Galvanizing Services. Britain domiciled firm is a supplier of products for companies involved in the construction and maintenance of national roads and structural engineering. Its secondary business is galvanizing services that contain a cluster of companies supplying galvanizing and materials coating services to the construction, agriculture and infrastructure industries.
