Victrex PLC (LSE:VCT) shares were up 1.5% after Deutsche Bank upgraded the stock to 'buy' from 'hold', raising its price target from 1,160p to 1,280p.
Analysts noted the stock has fallen 30% over the past year. Despite the decline, Victrex remains a strong cash-generating business.
With its major capacity expansion now complete, the company is expected to deliver a free cash flow yield of 6.6% in the 2025 financial year.
It also offers a 6.2% dividend yield, and share buybacks are now part of its shareholder return strategy.
Currently trading at 14.5 times its expected 2025 earnings and 8.8 times its enterprise value to earnings before interest, taxes, depreciation, and amortisation, the shares are well below five-year averages of 19.2 times and 13.2 times, respectively.
Deutsche Bank sees the lower valuation, strong cash flow, and shareholder-friendly policies as reasons to revise its rating, viewing the current price as an attractive opportunity for investors.
Victrex specialises in high-performance polymer solutions. It is best known for producing PEEK (polyether ether ketone) and other thermoplastic materials used in industries such as aerospace, automotive, electronics, energy, and medical.
In late morning trading, the shares were up 15p at 977p.