Numis starts coverage of Tristel at 'add'

Numis started coverage of Tristel on Thursday with an ‘add’ rating and 390p price target.

It said Tristel is a unique play within UK Medtech, offering high-level disinfectants, backed by a proprietary chemistry, used for the decontamination of medical devices and surfaces in hospitals.

"We think Tristel could more than double revenue and profits over five years, with the base business underpinned by diagnostic procedure demand, while potential US market expansion, pending FDA approval, represents a significant growth inflection point, which we believe is partly discounted," it said.

Numis said that optically, its multiple - circa 15x EV/EBITDA - is not particularly cheap, but should growth catalysts materialise, "we could see outer year multiples unwind".

“With the FDA decision pending (Jun-23), we account for some US optionality, setting our target price at 390p, and initiate with an add rating.”