Berenberg lowers target price on Oxford Instruments
Analysts at Berenberg lowered their target price on manufacturing and research firm from 2,600.0p to 2,500.0p on Tuesday but noted the group had made a "quantum leap in cash" from self-help efforts.
Berenberg noted that Oxford Instruments was transitioning into a more commercially focused organisation, leveraging its "strong technology portfolio" with greater operational efficiency and rigour.
The German bank stated that it views Oxford Instruments' compound semiconductor exposure as "a key driver" of revenue and profit growth in the coming years.
"Following three years of flat operating profits and volatile cash generation, we forecast an inflection in the coming 12 months, said Berenberg. "The valuation is attractive, with scope for a re-rating as cash generation doubles by FY28E."
Bernberg also noted that with a 25% potential upside, it had opted to reiterate its 'buy' rating on the stock, adding that it sees scope for a re-rating as improved financial metrics are delivered.
Reporting by Iain Gilbert at Sharecast.com
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