Berenberg ups target price on Tekmar

Analysts at Berenberg raised their price target on engineering services company Tekmar Group from 160.0p to 180.0p on Tuesday following the firm's first-half results for its 2020 financial year.

With strong revenue growth across all divisions, Berenberg stated Tekmar was "firmly on track" to meet consensus expectations for 2020 after its management upped the company's full-year revenue guidance by roughly 10%.

Berenberg also highlighted that recent acquisitions such as Subsea Innovation were also performing well and helping to diversify Tekmar into other attractive subsea segments.

However, with a larger proportion of this year's growth coming from lower-margin subsea work, Berenberg left its forecast for underlying earnings unchanged.

"But we think this is a good demonstration of the company's strategy to diversify the business and leaves it well placed over the medium term," said the analysts.

The German bank noted that, as expected, the year would follow a second-half weighting, but with a record order book of £15.9m Berenberg felt there was also "good visibility into the remainder of the year".

With a market-leading position in the fast-growing offshore wind market, successful expansion into new subsea segments and a net cash balance sheet, Berenberg said it also remained "positive" about the medium and longer-term opportunity presented by Tekmar.

"As a result, we remain happy buyers and up our price target to 180p," said Berenberg.