Berenberg starts off Strix at 'buy'

Analysts at Berenberg initiated coverage on kettle safety manufacturer Strix Group at 'buy' on Wednesday, branding the stock as "a strong cup of tea".

Berenberg said with a well established and large market share, sector-leading operating margins and "exceptionally high" returns, it thinks Strix has "many attractive characteristics", especially with the company now "rapidly expanding" into adjacent markets – water filtration and other small domestic appliances – which should add substantial scale in the coming years.

The German bank also believes Strix has strong environmental, social and corporate governance credentials, which it said were "arguably currently overlooked" by investors.

"Considering we believe Strix can double revenues on a five-year view, shares appear significantly undervalued at 17x FY 2022 price-to-earnings ratio," said Berenberg, which started the stock off with a 330.0p target price.

"At a 37% discount to peers, we believe shares are mispriced and believe there is a material rerating opportunity as the group delivers its growth ambitions and the ESG story evolves."