JPMorgan upgrades Synthomer to 'overweight'

It noted that Synthomer sells nitrile latex for nitrile gloves and that this business made up around 20% of the company’s earnings in 2019, "hence the earnings tailwind from the Covid-19 are well known".

"However, we believe that both the magnitude and the duration of this upside is likely to be better than the market assumes."

JPM said there is a potential of further significant upside as it has significantly discounted the potential tailwind that it calculates from the substantial step-up seen in nitrile prices/spreads due to tight supply.

"As Covid-19 vaccines become widely available, the gloves demand will moderate but this might be not happen till 2H21/2022," the bank said. In addition, it is possible that the greater focus on hygiene might result in structurally higher gloves demand in the future.

"There should be an improvement also in other businesses in 2021 with a tailwind from cost synergies from Omnova acquisition (closed 1 Apr 2020)," JPM added.

It said strong earnings momentum and upside to consensus should likely drive some re-rating in the near term.

At 1105 GMT, the shares were up 2.1% at 396.60p.