The latest research note from Shore Capital highlights growing confidence in Norcros plc (LON:NXR), as the Group continues to demonstrate resilient trading and disciplined strategic execution.
Shore Capital has been appointed joint corporate broker to Norcros, marking what the broker describes as an exciting time to be associated with the business. Research Analyst Tom Fraine, CFA, is clear in his positive outlook.
He writes, “We continue to see significant upside for the shares with our 630p fair value indicating >70% upside, and we highlighted in our October 2025 publication the scope for an 850p (135% upside) share price in the medium-term if the company delivers its targets, which it has made excellent progress towards without supportive market conditions.”
That confidence is rooted in both operational improvements and clearly defined financial objectives. The broker notes that management has taken decisive strategic actions to improve the quality of the Group while maintaining strong trading under difficult conditions.
Strong Momentum and Clear Targets
According to Shore Capital, Norcros shares have roughly doubled over the past two years, supported by a growing dividend that continues to provide additional shareholder returns.
The company has set ambitious medium term targets, including:
• Organic growth of 2 to 3% ahead of the market
• A 15% operating margin
• A 20% underlying return on capital employed
• Cash conversion above 90%
Fraine adds, “We believe the achievement of these targets could comfortably justify a PER multiple in the teens.”
Financial Highlights and Forecasts
Drawing from the summary of financials and forecasts in the research note:
Full Year 2025A
• Revenue of £368.1m
• Adjusted EBITDA of £46.4m
• Adjusted PBT of £36.5m
• Adjusted EPS of 32.4p
• Dividend per share of 10.4p
Forecast Year 2026F
• Revenue expected to rise to £394.8m
• Adjusted EBITDA forecast at £52.5m
• Adjusted PBT of £38.4m
• Adjusted EPS of 33.1p
Looking further ahead to 2027F, revenue is forecast to reach £440.9m with adjusted EPS of 37.4p, reflecting anticipated margin progression and operational leverage.
Fund Manager Perspective
In a recent DirectorsTalk interview, Gervais Williams, Co-Fund Manager of Diverse Income Trust plc emphasised the strength of the Group’s brand portfolio and the benefits of acquisitions in strengthening growth. He highlighted continued focus on disciplined capital allocation, operational efficiency and driving returns, while remaining confident in the long term structural drivers of demand across its markets.
This commentary aligns closely with Shore Capital’s assessment that Norcros has made excellent progress towards its targets, even without supportive market conditions.
Valuation Context
With the shares trading at 356p at the time of the note and a forecast PER of 10.7x for FY2026, Shore Capital believes the valuation does not fully reflect the Group’s improving margin profile and cash generation potential.
On a free cash flow basis, yields remain attractive, while dividend growth continues to underpin the investment case.
Final Thoughts
In Summary, the latest research note from Shore Capital presents a clear case that Norcros plc is delivering operational improvement and progressing towards ambitious financial targets. With forecast earnings growth, disciplined management and a valuation that suggests meaningful upside, the Group appears well positioned for further progress should it continue executing as outlined.
