Analysts at Berenberg raised their target price on instrumentation firm Spectris from 3,460.0p to 3,505.0p on Tuesday, stating the group’s turnaround efforts appeared on track to pay off.
Berenberg said a Spectris share price of more than £28.0 had historically been a “strong signal” to take profits. However, the analysts stated this time was “different”, with the turnaround now in “full swing” and starting to bear fruit, in its view.
The German bank pointed out Spectris’ portfolio reshaping was “progressing well” and margins were poised to trend higher, while also highlighting that a £200.0m buyback had been announced and the group still has never had more balance sheet optionality than it does it present.
“We upgrade our EPS estimates by 5-9% today, but are optimistic of further earnings momentum over the next 12 months,” said Berenberg, which also reiterated its ‘buy’ rating on the stock.
“Shares trade at 23.5x 2021 P/E and 14.0x EV/EBITDA, which is broadly in line with our 26-stock strong UK industrials coverage. In 2013, shares traded at a 40% premium and what management is attempting to achieve would result in a similar business to that period.”
