Mpac Group Plc Share Price (MPAC)

Simon Thompson of Investors Chronicle has produced another out of hours article updating three of his recommendations, including MPAC.

The article gives broker targets from Equity Development and Panmure Gordon of 600 and 650 respectively (although the ED target is a typo).

ST raises his target to 600 from 550. The primary basis for this appears to be a narrowing of the PE discount compared to the engineering sector.

He quotes a forward PE of 14 for MPAC and an engineering sector PE of 20. His 600 target is based on a 20% discount to the sector.

Panmure have EPS of 36.1p.

Personally I think that the target given is a little weak and unambitious. Why would a company growing at the rate of MPAC have a discount to the engineering sector? Surely a premium is more appropriate? I suppose that the target that has been set reflects the current deep discount and some narrowing of this whilst also giving room for upgrades.

Using Panmure's EPS and a sector average PE would provide a target of 720p and that's before any cash adjustment!

There is some scepticism that the best engineering companies could consistently expand the top line at 10%+ organically, whilst delivering 10%+ EBIT margins over the economic cycle. This rarely happens, but due to astute foresight, attention to detail & almost flawless execution, we think {{linkedin_mention(urn:li:organization:75780|Mpac Group plc)}} has every chance of breaking the mould.

Helped not only by its 100% exposure to the expanding healthcare, food/beverage and pharmaceuticals industries, but also the secular tailwinds of Ecommence, Industry 4.0, ageing populations, premiumisation, reshoring, biodegradable/recyclable materials and consumer convenience. Elsewhere there are other exciting prospects. Not least in craft beers (re post £10m Switchback acquisition in Sept’20), alongside designing state-of-the-art packaging equipment to manufacture Covid tests and/or vaccine vials, which could add further juice.

Therefore irrespective of the recent price appreciation – we believe there’s still plenty to go for. Lifting our valuation from 445p to 600p/share, yet equally acknowledging that if Mpac can achieve it’s “10+10” target, then the stock would rightly deserve at least a market multiple, driving it to possibly >£10 by 2023.

https://www.equitydevelopment.co.uk/research/strategic-progress-drives-valuation-to-600p/share

MPAC Group Plc (MPAC) Spoken about in a piworld interview with Edmund Shing, watch what he has to say on https://www.piworld.co.uk/2021/02/26/piworld-interview-with-edmund-shing-the-idle-investor/ at 12:35.
Or listen using the following link: https://piworld.podbean.com/e/piworld-interview-with-edmundshing-the-idle-investor/

Mpac Group plc, a global leader in 'Make, Pack, Monitor and Service' high speed packaging and automation solutions, will be conducting a live presentation covering their Full Year Results for the year ended 31st December 2020.

The event will take place at 11am, on Wednesday 17th March 2021.

The online presentation is open to all existing and potential shareholders and registration is free.

Questions can be submitted during the presentation and will be addressed at the end.

https://zoom.us/webinar/register/4216140778567/WN_fpJBehgxTP2thGAmVSpZow

Today this share was recommended as a strong hold in the new release of the respected publication Small Company Share Watch!