A 145-year-old British industrial company is positioned to capitalize on major trends, including the reshoring of manufacturing and increased defense spending, according to analysts at Shore Capital. London-listed Renold plc , which traces its roots to 1879 and Hans Renold , the inventor of roller chains, is the world’s second-largest industrial chain manufacturer. The company commands about 8% of a market worth more than £3 billion ($3.8 billion). RNO-GB YTD line The Manchester-headquartered company makes chains, gears, and transmission products that are essential components of automated manufacturing systems, where even a brief downtime can cost companies millions. Analysts say supply of such components has become increasingly critical to modern manufacturing, especially after the Covid-19 pandemic and trade tariffs in recent years have upended global supply chains. U.S. President-elect Donald Trump has threatened to apply 10% import duties on products brought into the U.S., with imports from China potentially facing additional duties of up to 60%. Renold, however, operates two manufacturing facilities each in the United States, United Kingdom, Australia and six others globally to serve its customers in more than 100 countries, thereby potentially avoiding Trump’s taxes . “We believe with its high-quality, essential/mission-critical product offering and strategically located manufacturing/customer service locations, Renold will be a significant beneficiary of structural trends such as onshoring, reindustrialisation, automation and defence,” said Shore Capital analyst Akhil Patel in a research initiation note to clients on Nov. 13. Shore Capital has a “buy” rating and a target price of 90 pence per share, which points to more than 60% upside from the current share price of 55 pence. U.K. shares are generally priced in pence, with 100 pence equal to one British pound ($1.27). The company’s shares have risen by more than 55% this year as it has expanded through acquisitions. In September, Renold acquired MAC Chain Company for $31.4 million, expanding its presence in the United States and Canada even further. The Shore Capital analyst also noted that their 90 pence target price could rise to 130 pence if Renold continues its acquisition strategy of around one purchase of around £20 million in revenue annually. That would lift the stock by 133% from current levels. The company also reported steady performance in its latest trading update, with orders up 14% to £105.5 million in the five months through August. Looking ahead, the company also said that its order book stood at £85.5 million. “Our order book at year end was close to historic highs and well above pre-pandemic levels,” said Robert Purcell, chief executive of Renold, in an earnings call with analysts in July.
