Analysts at Shore Capital said the 145-year-old British industrial company is preparing to take advantage of key trends, including reshoring manufacturing and rising defense spending. The history of Renold plc, a London-listed company, can be traced back to 1879. Hans Renold, the inventor of the roller chain, is the world’s second largest industrial chain manufacturer. The company accounts for around 8% of a market worth more than £3 billion ($3.8 billion). RNO-GB YTD Series The Manchester-based company makes chain, gear and transmission products, which are critical components of automated manufacturing systems where even brief downtime can cost companies millions of dollars. Analysts say the supply of such parts is becoming increasingly important to modern manufacturing, especially after the Covid-19 pandemic and trade tariffs in recent years upended global supply chains. U.S. President-elect Trump has threatened to impose a 10% import tariff on products imported into the United States, of which imported products from China may face additional tariffs of up to 60%. However, Renold operates two manufacturing plants each in the United States, the United Kingdom, and Australia, as well as six other plants around the world, serving customers in more than 100 countries, thereby potentially evading Trump’s taxes. Shore Capital analyst Akhil said: “We believe Renold will be a key player in localization, re-industrialization, automation and… A big beneficiary of structural trends such as defence. UK shares are typically priced in pennies, with 100 pence equaling 1 pound ($1.27), as the company gains scale this year. Shares have risen by more than 55%. In September, Renold acquired MAC Chain for $31.4 million, further expanding its operations in the United States and Canada. Analysts at Shore Capital also noted that if Renold continues to generate revenue of about 20 million pounds per year. A takeover strategy, their 90p price target could rise to 130p, which would see the shares rise 133% from current levels. The company also reported solid results in its latest trading update, as of August. Orders rose 14% during the month to 105.5 million pounds. Looking ahead, the company also said its order book totaled 85.5 million pounds. Renold chief executive Robert Purcell said on an earnings call with analysts in July: “We end the year. Order volumes are near record highs and well above pre-pandemic levels. “
UK-listed Renold plc could rise on onshore trend | Real Time Headlines
RELATED ARTICLES