JP Morgan raises target price on Spectris

4th Mar 2024 10:40

(Sharecast News) - Analysts at JP Morgan raised their target price on instrumentation and controls group Spectris from 2,900.0p to 2,950.0p on Monday, but noted that the group's full-year results had left it with "little to get excited over".

JP Morgan said Spectris' full-year results pointed to "a cautious start to the year" and one that will be more reliant on a stronger second-half recovery, with orders ending the year down 5% on a like-for-like basis and the group not expecting orders in key end markets to recover until H2. This news pushed the shares down 7% since the news and 11% year-to-date.

"We update our numbers which decline circa 6%, mainly reflecting the Red Lion disposal, and we continue to see risk to consensus earnings, unless order intake picks up significantly in the coming months," said JPM. "Moreover, with the portfolio rationalisation complete, the margin expansion story less exciting from here (in our view) and uncertainty over order intake, we see less scope for positive news flow (outside potential M&A) in the coming quarters."

JP Morgan, which reiterated its 'underweight' rating on the stock, added that its increased price target principally reflected the business' improved cash from the Red Lion disposal.

Reporting by Iain Gilbert at Sharecast.com