Berenberg raises target price for Vitec shares

Analysts at Berenberg raised their target price on camera supplies manufacturer Vitec Group from 570.0p to 630.0p on Thursday but noted that the firm's recovery profile remained "mixed".

Berenberg noted that as a developer of broadcasting and photographic equipment, Vitec has been "in the eye of the Covid-19 storm" given the cancellation of most major events and halting of film production.

The analysts expect revenues in Vitec's production solutions division to halve in 2020 but noted there were early signals of recovery with the return of the Premier League and Bundesliga.

"2021 should hopefully witness a return to some normality, including the all-important Tokyo Olympics," said Berenberg.

The German bank said it takes "some comfort" in management's "quick reaction" to these challenges, having implemented significant cost savings, extended bank facilities and putting covenant waivers in place.

"However, while the outlook is undoubtedly improving, we remain hesitant about the speed of recovery, particularly among its amateur and professional photographer customers," said the analysts.

With shares trading at 13.7 times 2020's price-to-earnings ratio and 7.3 times enterprise value/EBITDA, the analysts think the risk/reward profile at Vitec is currently "balanced" and kept their 'hold' rating on the group unchanged.