Berenberg reiterates 'hold' rating on Polypipe

Analysts at Berenberg reiterated their 'hold' rating on plastic piping manufacturer Polypipe on Wednesday, noting that although near-term uncertainty remained, the group was poised to be a "mid-term winner".

Berenberg said that after hosting a virtual "fireside chat" with Polypipe chief financial officer Paul James, on 16 June, it felt positive about medium-term structural opportunities presented to the group as it continues its transition into a "one-stop-shop".

The German bank said Polypipe's transition should also be aided by its "strong balance sheet" since its £120m equity raise in May but still warned that nearer-term, uncertainty was "high" and said it remained "cautious" on the pace of the recovery in key end-markets.

"Management said that the high uncertainty means that it is taking a cautious approach to capex budgets and M&A, with the next two to three months being crucial for how it chooses to proceed," said the analysts.

"When assessing this against current valuation, we see better risk/reward elsewhere in the sector," added Berenberg, which kept its 480p target price on the group unchanged.