James Cropper Plc (LON:CRPR) has been highlighted as a compelling recovery and re-rating story in the latest research note from Singer Capital Markets, which initiated coverage with a Buy recommendation and a 560p target price.
The note argues that the company is entering FY27 in a much stronger position than a year ago, following a repaired balance sheet, a return to profitability in Paper & Packaging and continued strength in Advanced Materials. At a current share price of 380.0p, the target price implies around 47% upside.
The research is positive on the group’s shift from turnaround to recovery, and it makes the case that investors are still valuing James Cropper too much through the lens of its historic challenges rather than the quality of its specialist materials businesses.
Highlights from the latest research note:
- Group revenue rose 3.6% to £102.9m in FY26.
- Adjusted EBITDA increased 33% to £8.9m.
- Net debt fell to £8.1m, taking leverage below 1.0x EBITDA.
- Paper & Packaging returned to EBITDA profitability in 2H26.
- Advanced Materials delivered record revenue and a 28.6% EBITDA margin in FY26.
- The broker’s base case points to FY26a to FY29e adjusted EBITDA CAGR of 11% and adjusted EPS CAGR of 18%.
According to the note, Advanced Materials is the core of the investment case. The division supplies nonwoven materials and electrochemical coatings into aerospace, defence, industrial composites and energy markets, and benefits from long qualification cycles, embedded customer relationships and high barriers to entry. The report says the business generated £11.4m of EBITDA on £38.6m of revenue in FY26, underlining its quality and resilience.
Paper & Packaging, meanwhile, is described as moving from turnaround to value creation. The division has a long heritage in specialist papermaking and premium packaging, but the report says it had historically under-earned because of operational inefficiencies, weak pricing discipline and low utilisation. Management’s Three-Peak model is now aimed at restoring volume, improving flexibility and lifting profitability through self-help measures rather than relying on a cyclical recovery.
The note also points to early evidence that the strategy is working. Paper & Packaging revenue fell only slightly in FY26 despite the loss of a major customer, while adjusted EBITDA losses narrowed from £2.1m in FY25 to £0.5m in FY26. The division is expected to remain profitable in FY27, with the research forecasting EBITDA improving to £1.6m in FY27E and £2.3m by FY29E.
Advanced Materials is expected to see some near-term volatility, with FY27 likely to be affected by a customer-specific hydrogen-related headwind. Even so, the note stresses that this does not alter the broader investment case, which is anchored by established industrial markets rather than hydrogen alone. The division is forecast to recover from £9.8m of EBITDA in FY27E to £11.7m by FY29E.
Balance sheet progress is another key theme. The report says net debt has fallen materially, while a new long-term funding structure put in place in July 2026 should improve financial flexibility. Free cash flow is expected to be uneven in the near term as working capital, tax and capital expenditure normalise, but the medium-term outlook is described as attractive.
The valuation work is also supportive. Using a sum-of-the-parts approach, the note values Advanced Materials at 8.0x FY28E EBITDA and Paper & Packaging at 4.0x, resulting in a 560p target price after discounting. The report adds that the shares still trade below the group’s long-term average valuation, suggesting scope for further upside if execution continues.
Overall, the message from the research note is clear: James Cropper is no longer just a turnaround story. With profitability improving, leverage lower and the core specialist materials franchise gaining recognition, the company may be moving into a new phase where the market starts to reward progress more fully.
