Berenberg downgrades Tyman to 'hold'

Berenberg said while Tyman had made "good progress" on its turnaround plan over the last few years, inflationary pressures and "an increasingly bearish end-market outlook" would now make it "difficult" for the group to outperform.

The German bank also noted that although Tyman trades at a 21% discount to peers, it said that this already appears to have narrowed versus history and, given likely earnings revisions, it believes there are currently limited catalysts to support a re-rating.

"We downgrade our recommendation to Hold with a new price target of 250p as we await signs of a bottoming out in US activity," said Berenberg, which also transferred coverage to analyst Lushanthan Mahendrarajah.

"Shares trade on 6.8x 2023 EV/EBIT. While optically cheap, we note that the discount to peers has already narrowed to 21% versus 25% historically. Given the risk of downwards earnings revisions, we see limited catalysts for a re-rating in the near term."

Reporting by Iain Gilbert at Sharecast.com