On Wednesday, Deutsche Bank (ETR:DBKGn) adjusted its price target for Victrex (LON:VCTX) Plc (VCT:LN) (OTC: VTXPF), a leading manufacturer of high-performance polymers. The new target is set at £11.60, reduced from the previous £13.00, while the firm has chosen to maintain a Hold rating on the stock.
The adjustment comes after Victrex reported annual results that fell short of the bank's projections. Although the company saw a 4% year-over-year increase in sales volumes, reaching 3,731 tonnes compared to the estimated 3,716 tonnes, other financial metrics did not meet expectations.
The group's revenue came in at £291 million, a 5% decrease from the previous year and slightly above the consensus estimate of £290 million but below the bank's forecast of £299 million.
Gross profit for the year also did not align with the bank's predictions, registering at £134.3 million against an expected £147.6 million. Adjusted profit before tax (PBT) was reported at £59.1 million, falling short of the anticipated £63.4 million.
Moreover, adjusted earnings per share (EPS) experienced a significant year-over-year decline of 33%, coming in at 51.7p compared to the bank's estimate of 61.5p. This discrepancy was attributed to a higher-than-expected effective tax rate (ETR).
Despite the underwhelming performance in some areas, Victrex's fourth-quarter sales volumes of 1,015 tonnes lend support to the company's guidance, which anticipates at least mid-single-digit volume growth for the fiscal year 2025. Nevertheless, Deutsche Bank's broader sector outlook remains cautious regarding the pace of recovery in the industry.
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