- Synthomer
- 06 May 2026 14:21:39
Source: Sharecast
Berenberg noted that Synthomer's shares had risen by 37% from their multi-year lows at the start of 2026, and noted that the rally was "broadly fair", in its view.
The German bank said the high amount of debt relative to equity meant that the share price was "very sensitive even to small changes" in Synthomer's earnings outlook. It also noted that the worst-case scenario − which would entail a covenant breach and debt-for-equity swap − has been averted by the renegotiation of covenants on 30 April.
"The recent improvements in EBITDA outlook for 2026 are not small, even if they are temporary in nature. Feedstock shortages of butadiene in Asia and other chemicals sourced from the Middle East have pushed up prices for nitrile latex and acrylics," said Berenberg, which reiterated its 'hold' rating on the stock.
"The circa £60m/30m/11m increases to our 2026/27/28 EBITDA estimates primarily reflect higher margins in nitrile latex and acrylate monomers; this is partly offset in outer years by higher assumed interest costs. Shares trade on circa 4x EV/EBITDA, at the lower end of diversified chemicals (these typically range from 4-10x)."
Reporting by Iain Gilbert at Sharecast.com