Cookson Group Plc (CKSN), the world’s biggest maker of ceramic linings for metal smelters, rose in London trading after Credit Suisse Group AG predicted the stock will outperform benchmarks on improving trading conditions.
The stock has more than doubled since March 4, when Cookson raised 241 million pounds ($394 million) from investors to remain within banking terms after slumping demand for steel and electro-plating materials hurt sales. The London-based company said last month it had no plans to ask shareholders for additional cash as demand was showing signs of improving.
“It’s not too late,” Smith and Wong said in their report. “We believe there is still 40 percent upside potential due to the very depressed condition of end markets, earnings upgrades and a fading financing hangover.”
Cookson shares traded at 404.3 pence as of 9:28 a.m. local time. Credit Suisse set a 12-month share price estimate of 550 pence.
“We believe consensus is underestimating the bounce back in steel and electronics volumes” and “concerns about stretched covenants to fade,” the analysts said.
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