Strong Volume Momentum Continues for Victrex; Shares Overvalued

Narrow-moat Victrex reported third-quarter sales volume of 1,202 metric tons, broadly in line with expectations. Shares are trading up modestly intraday. Last quarter, we asserted management's tone on the second half seemed a bit too conservative. This has proved true. Victrex now sees some upside to current full-year expectations with its internal assumptions now close to the upper end of the company-compiled consensus, which is for sales volume of 4,220 metric tons. The fourth-quarter volume will likely be slightly lower, sequentially. We don’t expect to make any material changes to our model or GBX 2,100 fair value estimate. At current levels, shares look overvalued.