JP Morgan remains confident in De La Rue after unsuccessful passport bid

Despite the continued ‘overweight’ rating, the analysts did lower their target price for shares in De La Rue from 700p to 600p, citing downwards revisions to their near-term operating profit forecasts for the company and "an adjustment to the list of peers in our Sum-Of-The-Parts valuation".

Basingstoke-based De La Rue engages in banknote manufacturing, security printing of passports and tax stamps, brand authentication and paper-making.

The investment bank's estimate of De La Rue’s underlying operating profit in fiscal year 2018 dropped from £71.1m to £62.5m.

That drop was as a consequence of the writing-off of the company’s £4m bid costs associated with the unsuccessful UK passport tender and delays suffered with currency and identity contracts in the later part of the year, they explained.

Similarly, they also marked down their projection for 2019 underlying operating profits by 6% to £63.2m.

However, the analysts stood by an earlier projection for a 6.4% year-on-year rate of growth in revenues in 2018, rising to £491.6m.

In their research note, which was dated 24 April, JP Morgan added: "Our adjusted EPS estimates decline by 11% to 42.0p in FY18 and by 4% to 43.6p in FY19. We model De La Rue holding its DPS this year and next at 25.0p."

As of 1427 BST, De La Rue’s shares were up 2.42% at 512.00p.