Canaccord Genuity lowers target price on Strix Group

Analysts at Canaccord Genuity lowered their target price on kettle safety controls manufacturer Strix Group from 375.0p to 300.0p on Thursday as it pondered whether near-term headwinds would "bark or bite".

Canaccord Genuity stated that while Strix's full-year results were in line with its expectations, the firm's outlook flagged geopolitical uncertainty and ongoing headwinds from an inflationary environment.

Although the Canadian bank acknowledged that measures were in place to increase prices in the second quarter of the year, it said Strix's £7.0m of indirect revenue exposure to the Commonwealth of Independent States, with £3.0m of those sales being attributable to Russia, were a concern given the current conflict in the region and resulting sanctions. It also noted risks stemming from potential Covid-19 lockdowns in China.

"With demand visibility understandably low the question is whether these headwinds will bark or bite. We prudently trim our FY22E-23E adj. EPS estimates by 2.2% and 3.2%, respectively, to reflect the uncertainty," said Canaccord, which stood by its 'buy' rating on the stock.