Essentra plc : End of the technical recovery
By Bastien Chabasseuil
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 814 | GBX 0 | GBX 846 | +100% |
The fundamentals remain very fragile. The security seems highly overvalued compared to other securities in its sector. The enterprise value EBITDA ratio underlines this point with a ratio at 13.5x for 2013 and at 11.5x for 2014.
Graphically, the stock went through a period of rebound in recent sessions towards the GBp 830 medium-term resistance. The share should consolidate near this area. It could act as a stopping point of the upward movement. This scenario suggests a return to the GBp 797.5 support area which will be a bearish objective.
Due to the technical configuration and the fundamental situation, it does not justify the current valuation of the group, investors can open a short position close to the GBp 830 resistance. The price target is set at GBp 797.5 and a stop loss will be placed above GBp 830.