Broker tips: Spirax-Sarco Engineering, Morgan Advanced Materials, Dr Martens

"We now see the shares as presenting an attractive entry point, having de-risked our FY23e estimates and updated our views on the drivers of growth ahead of IP from next year," it said.

"We note near-term risk/reward is now better balanced, following share price weakness in Q2 (-15% underperformance versus defensive peer Halma)."

UBS added that while consensus has been coming down recently, the shares are not reacting to downgrades.

It said the stock’s valuation is as attractive now as it was at the Covid trough in March 2020 on an EV/ EBIT basis.

"On a price-to-earnings basis shares are near the 15-year average, representing even better value, for a group that can grow revenues organically at mid single digit+ through cycle (outperforming trade-weighted IP by 4x on our analysis) maintaining sector-leading margins and compounding earnings growth at double-digits (12% compound annual growth rate in our model)."

Elsewhere, Barclays initiated coverage of Morgan Advanced Materials with an ‘overweight’ rating and 365p price target.

"We think improving end-market exposure will drive higher through-cycle growth for MGAM, with the group EBITA margin expanding to mid-teens and a new peak," it said.

The bank noted that focused M&A is on the agenda, but said it also sees scope for a supportive capital return, while longer term further portfolio rationalisation could drive multiple expansion.

Bank of America Merrill Lynch upgraded Dr Martens to ‘buy’, arguing that the iconic bootmaker has an "attractive value proposition".

The bank noted that Dr Martens shares have de-rated by 25% since the IPO.

"We see opportunity to consider the stock given its more robust earnings expectations and signs of a cleaner equity story to come," it said.

BofA ML said the shares are "simply too cheap" and that four profit warnings in the last 12 months and a recent downgrade to medium-term guidance suggest expectations have reset.

The bank pointed out that changes are on their way. "The group is reinvesting in the business, which should help limit operational surprises, while senior personnel changes are also taking place," it said.

BofA also noted that the brand isn’t broken and that its popularity has actually improved.

In addition, it forecast return on capital employed above peers.

BofA cut its price target on the stock to 165p from 210p.