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Highlights:

  • Berenberg reiterates a Buy rating with a price target of AUD 4.12, reflecting a 25% upside potential.

  • Davy maintains an Outperform rating with a price target of AUD 3.92, implying an 18.75% upside.

  • Analysts’ confidence might be supported by Stelrad’s margin management and market position despite volume headwinds.

Stelrad Group PLC (LSE:SRAD), a leading manufacturer and distributor of steel panel and designer radiators across the UK, Europe, and Turkey, has received continued backing from key analysts Berenberg and Davy following the release of its interim results for the six months ended 30 June 2025.

Berenberg's Analyst Edward H. Prest has reiterated its Buy recommendation on Stelrad, setting a price target of AUD 4.12, which represents a 25% premium to the current market price. The company’s disciplined pricing strategy, ongoing margin improvement, and structural currency gains might be the reasons for maintaining a bullish stance. 

Meanwhile, Dublin-based investment firm Davy's Analyst Florence O’Donoghue has reaffirmed its Outperform rating, assigning a price target of AUD 3.92, suggesting an 18.75% upside potential. The company’s operational excellence and proactive margin management might be underpinning this forecast.

The analysts’ confidence might come against a backdrop of mixed financial performance for the half-year. Adjusted operating profit rose 1.1% to £15.9 million, with margins improving by 0.7 percentage points to 11.7%, reflecting the company’s ability to navigate cost pressures and currency fluctuations. Revenue, however, fell 4.6% to £136.5 million due to subdued demand in the Repair, Maintenance and Improvement (RMI) and new build markets. Regionally, UK & Ireland revenue declined 5.8%, while Europe saw a 5.9% drop; Turkey & International, in contrast, posted a 17.9% revenue gain.

Stelrad also announced a 2% increase in its interim dividend to 3.04 pence per share, underscoring the Board’s confidence in its growth trajectory and cash generation capabilities. Net debt leverage stood at 1.48x at the end of June, a slight increase from December 2024 but within comfortable levels given the company’s cash flow resilience.

Looking ahead, the company expects modest market volume improvements in the second half of the year. The Board remains committed to proactive margin management and cost control, with FY25 profit guidance unchanged.