Synthomer PLC (LON:SYNT) rose on Friday after Deutsche Bank upped its target price for the firm to 410p from 340p, retaining a ‘buy’ recommendation, on the back of potential medium-term growth in higher-margin specialty products.
In a note to clients, the German bank's analysts said 2020 will be an "operational transition year" for the FTSE 250-listed chemicals group, when management can show ability to address challenges in the styrene-butadiene rubber European business, where full-year volumes and unit margins are expected to be 10% behind 2018.
READ: Synthomer shares drop as chemicals firm warns on profit, reviews portfolio
The analysts noted that the company is also facing a delay in completing the acquisition of US polymers peer Omnova Solutions Inc (NYSE:OMN), after the European competition authorities pushed back the regulatory approval deadline to 15 January from 20 December.
“Whereas management always expected completion in late 2019/ early 2020, we note closure in late 2019 has remained the ambition since approval was granted by US authorities in August,” the analysts added.
Synthomer shares were up 2% to 355.20p on Friday morning.