Berenberg raises target price on Hill & Smith

Berenberg said the next leg of growth was "well underway" at Hill & Smith, with stronger sales growth, higher margins, better portfolio management, and improved messaging all on the agenda.

The German bank stated there were "glimpses of all four elements" in Hill & Smith's Tuesday trading update, with January-April sales growth up 10% year-on-year, while the closing of the group's loss-making variable messaging sign business marking another standout positive.

"Yet there has also been a notable and positive change in the group's messaging over the past few months," said Berenberg, which also reiterated its 'buy' rating on the stock.

"With shares still undemanding – at 18.5x 2022 P/E for a 4.3% FCF yield – we remain hugely optimistic about the opportunity ahead."