Berenberg ups target on Halma, but stays at 'hold'

Berenberg said Halma had "once again proved it is best-in-class", delivering a strong first-half performance against some very tough comparatives.

Organic growth of 5.0% and better-than-expected margins drove a 5.0% beat to consensus first-half underlying earnings, highlighted Berenberg. The analysts also pointed out that, as it had come to expect, growth at Halma was "broad-based", with every division and major end-market delivering good growth.

The German broker said it has no doubt that the company can continue to deliver strong numbers and also stated that it remained confident that Halma will double in size on a five-year view.

However, Berenberg noted that it still struggles to justify Halma's current valuation, which it believed was already pricing in a "significant upside" to consensus numbers.

"Halma's impeccable track record means it should remain a core long-term holding, in our view, but we believe other companies in the sector, such as Oxford Instruments and Electrocomponents, offer greater upside in the near term," said the analysts.

Berenberg raised its price target on Halma's shares to 1,850p from 1,705p.