Berenberg cuts target price for Synthomer, but stays at 'buy'

Nevertheless, the broker kept a 'buy' rating on shares with its new target price of 230p (down from 265p) still indicating significant upside from current levels.

"2025 will be a case of gradual, hard-won improvements for Synthomer, in our view. On the positive side, nitrile markets seem set for higher profitability yoy. Self-help measures should account for the largest single portion of earnings growth in 2025. Covenant risk also appears manageable," Berenberg said in a research note.

"However, the picture is more subdued for end-demand, partly because of 'higher-for-longer rates' in the US."

The broker highlighted a recent profit warning from US adhesives manufacturer HB Fuller, which cited order delays and headwinds from higher European gas prices.

While new trade tariffs proposed by Donald Trump could ease competition for Synthomer's Eastman adhesives resins business – which generates half of its sales in North America – "the negative earnings trajectory of some likely end-customers in the US [...] suggests that the demand outlook may take a few months to respond to any tax cuts or deregulation under the incoming Trump administration", Berenberg said.

Synthomer's share price was down 4% at 145.28p by 1042 GMT.