Berenberg hikes target price for Oxford Instruments
Oxford Instruments
2,070.00p
16:34 20/12/24
Berenberg has hiked its price target for shares of Oxford Instruments by 12% and reiterated a 'buy' rating, saying that the stock still trades at a significant discount to others in the sector despite strong growth momentum.
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Annual results from the industrial and scientific research tools group last week showed "good headline momentum", according to Berenberg, with revenues up 9.8% at constant currency.
Oxford Instruments also unveiled a new simplified business structure, where eight business units and six end-markets would be consolidated into just two divisions (Imaging and Analysis, and Advanced Technologies) and three core markets (materials analysis, semiconductors, and healthcare and life science).
Meanwhile, future medium-term targets – which included a 5-8% organic compound annual growth rate, margin improvements to above 20% a cash conversion projection of 85%+ – "appear reasonable", Berenberg said.
The broker has lifted its target price for the stock from 2,640p to 2,945p. Despite a 27% jump in the share price over the past two months alone, Berenberg said: "Its shares currently trade on an FY26 EV/EBIT multiple of 15.6x – a double-digit discount versus peers."
The stock was down 0.2% at 2,625p by 1019 BST.