Berenberg hikes target price on Hill & Smith

In particular, Berenberg highlighted how near-term trading was "resilient" considering recent market volatility stemming from the Covid-19 pandemic, with organic sales up by 4.8% in the first quarter, before the outbreak and associated lockdowns drove a 26% reduction in sales across April and May.

The analysts stated that H&S's road safety products business was "relatively unaffected" during the period and while acknowledging its US operations were weaker, the firm benefited from its 'critical business status' - allowing facilities to remain open throughout the second quarter. However, the German bank did note H&S's security products, pipe supports and UK/French galvanising operations had been more negatively affected.

The broker also pointed to a "gradually improving outlook" for H&S, stating the company appeared to be "through the worst of the downturn" - with all facilities back open, activity levels improving in key regions and May trading modestly ahead of April.

Finally, the analysts saw some "attractive" longer-term drivers for H&S, stating that even before the Covid-19 pandemic, the outlook for infrastructure spending was encouraging, particularly on UK roads projects.