Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 30 Jul, 25 | LXFR | Speculative Buy | USD 12.28 | USD 12.9 | USD 13.6 | 27 days | Closed |
11.40%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Luxfer Holdings PLC, together with its subsidiaries, designs, manufactures, and supplies high-performance materials, components, and high-pressure gas containment devices for defense and emergency response, healthcare, transportation, and general industrial end-market applications. It operates in two segments, Elektron and Gas Cylinders. The Elektron segment focuses on specialty materials based primarily on magnesium and zirconium. This segment also provides magnesium alloys for use in variety of industries; magnesium powders for use in countermeasure flares, as well as heater meals; photoengraving plates for graphic arts; and zirconium-based materials and oxides used as catalysts and in the manufacture of advanced ceramics, fiber-optic fuel cells, pharmaceuticals, and other performance products. The Gas Cylinders segment manufactures and markets specialized products using carbon composites and aluminum alloys, including pressurized cylinders for use in various applications comprising self-contained breathing apparatus (SCBA) for firefighters, containment of oxygen, and other medical gases for healthcare, alternative fuel vehicles, and general industrial applications. Luxfer Holdings PLC has operations in the United States, the United Kingdom, Germany, Italy, France, rest of Europe, the Asia Pacific, and internationally. The company was founded in 1898 and is headquartered in Milwaukee, Wisconsin.
Elektron Segment Revenue: Rose 19.3% year-over-year to USD 50.1 million, up from USD 42.0 million
Adjusted EPS Growth: Increased by 25% to USD 0.30 in Q2 FY25 from USD 0.24 in Q2 FY24
Gas Cylinders Revenue: Fell 5.6% to USD 47.0 million from USD 49.8 million
Declined Free Cash Flow: From USD 6.2 million in Q2 FY24 to negative USD 0.7 million in Q2 FY25
Luxfer faces concentrated exposure to defense and aerospace demand cycles, and any prolonged downturn or disruption in these sectors could materially affect its financial performance and growth trajectory
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 12.28 | 11.3 | 12.9 | 13.6 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Strong Revenue and Profitability Growth: Luxfer Holdings delivered a solid financial performance in the second quarter of FY25, with GAAP net sales reaching USD 104.0 million, a 4.3% increase compared to USD 99.7 million in Q2 FY24. Adjusted net sales, excluding the divested Graphic Arts segment, rose by 5.8% to USD 97.1 million. The company attributed this growth to favorable pricing strategies and foreign exchange impacts, which contributed USD 2.2 million and USD 2.0 million respectively. This sales expansion, alongside operational efficiencies, facilitated a 9.1% increase in gross profit and a 13.2% rise in adjusted gross profit.
Enhanced Profit Margins and Earnings Expansion: Earnings improved notably, with adjusted EBITDA rising 14.8% to USD 14.0 million in Q2 FY25 from USD 12.2 million in the previous year. The adjusted EBITDA margin expanded by 110 basis points, reaching 14.4%. Adjusted diluted earnings per share (EPS) also climbed 25% year-over-year to USD 0.30, driven by stronger mix, pricing leverage, and continued cost discipline. Notably, GAAP net income swung to a profit of USD 5.0 million, compared to a loss of USD 0.4 million in Q2 FY24, reflecting significant operational progress.
Segment Performance: Elektron Drives Growth: The Elektron segment demonstrated exceptional growth, with Q2 FY25 sales up 19.3% year-over-year to USD 50.1 million. Adjusted EBITDA for the segment rose 24.7% to USD 9.1 million, supported by robust defense and aerospace demand, including strong sales of MREs, UGR-Es, and flares. Gross margin expanded to 30.1%, a 110 basis point improvement. The segment's momentum was underpinned by increased volume and improved mix, as well as stabilization in pricing despite selective softness in zirconium products.
Gas Cylinders Faces Top-Line Pressure but Maintains Margins: In contrast, the Gas Cylinders segment experienced a 5.6% decline in sales, dropping from USD 49.8 million in Q2 FY24 to USD 47.0 million in Q2 FY25. However, the segment maintained its adjusted EBITDA at USD 4.9 million, supported by cost control and pricing actions. Margin improved slightly to 10.4% from 9.8%. The business continues to shift focus toward high-margin, high-value end markets like aerospace, space exploration, and electronics, partially offsetting weaker performance in clean energy and medical cylinders.
Strategic Execution and Operational Efficiency: Luxfer completed the divestiture of its Graphic Arts business in early July 2025, a move aimed at sharpening its strategic focus on high-growth core segments. The company also initiated a relocation project within the Gas Cylinders segment, which is expected to generate annual cost savings of up to USD 4 million. These steps are aligned with the company’s strategy to streamline operations and enhance margin performance through footprint optimization and automation initiatives.
Capital Allocation and Liquidity Position: Luxfer generated USD 1.2 million in cash from continuing operations in Q2 FY25, a decline from USD 8.9 million in the prior year due to the absence of legal recoveries. Free cash flow was negative USD 0.7 million compared to positive USD 6.2 million in Q2 FY24. Nonetheless, the company maintained a strong balance sheet with net debt reduced to USD 48.2 million, down from USD 69.9 million a year earlier, and a net debt-to-adjusted EBITDA ratio of 0.9x. Shareholder returns included USD 3.5 million in dividends and USD 0.6 million in stock repurchases during the quarter.
Outlook and Strategic Priorities: The company updated its full-year 2025 guidance, reflecting optimism due to continued defense and aerospace strength and ongoing operational enhancements. Luxfer now expects adjusted EPS in the range of USD 0.97–USD 1.05 and adjusted EBITDA between USD 49 million and USD 52 million. Despite softness in clean energy and some transportation markets, management remains confident in its ability to navigate headwinds and drive shareholder value through disciplined execution and strategic focus.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Luxfer Holdings PLC (NYSE: LXFR) at the closing market price of USD 12.28, as on July 29, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Industrials Industry: Specialty Industrial Machinery
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| LXFR Luxfer Holdings PLC |
-0.03 0.22% | 13.62 | 24.89 | 11.71 | 0.57 | 1.19 | 0.81 | 11.57 |
| SIEGY Siemens AG ADR |
-3.15 2.26% | 136.21 | 17.07 | 15.75 | 1.88 | 2.76 | 2.37 | 11.38 |
| SMAWF Siemens AG Class N |
-10.9 3.84% | 273.00 | 16.98 | 15.53 | 1.83 | 2.72 | 2.35 | 11.32 |
| GE GE Aerospace |
-5.18 1.73% | 293.55 | 12.87 | 26.60 | 1.61 | 4.69 | 1.61 | 8.43 |
| SBGSY Schneider Electric SA |
-1.95 3.46% | 54.41 | 25.90 | 20.92 | 3.12 | 3.98 | 3.50 | 17.37 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is Jul 29,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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