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(Sharecast News) - Analysts at Berenberg lifted their target price for DiscoverIE from 1,050p to 1,100p on Thursday, citing sustained organic momentum, a strengthening order book and earnings running ahead of expectations.
Berenberg, which reiterated its 'buy' rating on the stock, argued that the Discoverie's quality‑compounder model continues to offer upside and said the firm's H1 trading update confirmed a clear acceleration in organic growth, with the group expecting 10% year‑on‑year organic growth for the half.
Organic orders rose 22%, marking more than a year of consecutive order book build and underpinning future delivery. Berenberg also raised its adjusted earnings per share forecasts by 2% to 3% across the forecast period.
Momentum was broad‑based, led by Discoverie's magnetics and controls unit, which grew 13% organically, while sensing and connectivity was now positioned to accelerate as supply lead times normalise and tougher comparators fall away. Orders increased 25% in M&C and 18% in S&C, producing a book‑to‑bill ratio of 1.12.
Overall sales rose 13% at constant currency, supported by recent acquisitions, while net debt-to-underkying earnings stood at 1.6x at the end of September, rising to around 1.8x post‑acquisition, which Berenberg said still leaves roughly £35m of short‑term M&A capacity.
Berenberg added that DiscoverIE's long‑term compounding potential remains underappreciated, with management's 17% FY30 EBIT margin target and the benefits of the 3Gmetalworx deal not yet reflected in forecasts, offering a supportive backdrop for shareholder returns. Regulatory approval for the firm's acquisition of 3Gmetalworx was said to be progressing, with completion expected shortly
Deutsche Bank lifted its price target for Avon Technologies from 2,000p to 2,480p, saying last week's strategy event underscored the scale of the group's turnaround and justified higher earnings estimates.
The broker said Avon had "comfortably" exceeded its final FY27 operating margin target of 14% to 16% a year early, having already met all other strategic goals last year.
Deutsche Bank said the transformation under chief executive Jos Sclater has been "difficult to overstate", with underlying earnings and return on invested capital nearly tripling and leverage falling sharply.
DB highlighted a materially strengthened business, deeper customer relationships and a more competitive product portfolio. It pointed to Avon's first 100% order win on DoW filters earlier this year as evidence of improved execution - and a potential challenge for its key competitor.
The new 2,480p target reflects DB's 24% uplift, driven by higher earnings forecasts, a 12‑month roll‑forward to FY28 earnings per share and a small increase in the sector multiple. While the operational progress was clear, DB said the shares already price in much of the improvement, leaving it comfortable maintaining a 'hold' stance.
Reporting by Iain Gilbert at Sharecast.com
