Canaccord Genuity raises target price on Hunting

Hunting reported sales of $929.0m, up 28% year-on-year, and underlying earnings of $103.0m. Visibility for 2024 was said to still be strong, with a sales order book of $565.0m, up 19% on 2022. The outlook for further growth was said to still be strong, with end markets showing long-term demand for Hunting's products, and multiple further tenders ongoing.

"We see these results as an important step in Hunting's steadily building record of growth and profitability; as highlighted in the results presentation, there remains extensive scope for further improvement, as well as the potential that a robust balance sheet and profitable underlying business enables," said Canaccord Genuity, which reiterated its 'buy' rating on the stock.

The Canadian bank made minor changes to its forecasts for Hunting, primarily in non-cash depreciation and in working capital estimates, added in 2026 forecasts, and raised its price target on the improving visibility and robust cash flows.

"We base our target for Hunting on multiples, which means both an occasional shift forward in years and a strong element of judgment. With the business generating cash, with an outlook underpinned by a substantial order book, and with the potential for value-accretive transactions, we are raising our target to 450.0p (was 400.0p). At our target, the stock would trade at 7.2x/5.5x FY24/25E EV/EBITDA, which we still see as a conservative multiple," said Canaccord.

Reporting by Iain Gilbert at Sharecast.com