Broker tips: Filtronic, Sainsbury's, SSP

(Sharecast News) - Analysts at Berenberg hiked their target price on communications equipment designer and manufacturer Filtronic from 213p to 360p on Tuesday, stating a recent site visit had reinforced the company's potential. Berenberg said Filtronic continues to be "one of the best-positioned pure-play space names" in the UK market, in its view, noting that recent months have seen "a significant uptick" in sector newsflow, driven by "increasingly frequent" satellite launches and greater investor interest in the network services that will evolve to support this growth.

The German bank, which has a 'buy' rating on the stock, noted that the period has also seen developments for Filtronic, including new customer contracts and product launches, which it believes has increased its potential growth.

Berenberg added that in order to support its broader understanding of the sector and the specific Filtronic nuances, it had visited the firm's new headquarters and manufacturing facility at the North East Technology park in County Durham.

While Berenberg said no material information was disclosed, it stated it had come away "more confident in the range and scale of Filtronic's ambition and its potential". In particular, Berenberg stated a presentation from Filtronic's chief commercial officer had highlighted the group's "evolving go-to-market strategy", which it highlighted had led to "record order book coverage and a significant increase" in new customer numbers.

"Our price target increase reflects a number of factors, including: 1) recent contract wins with key customers across the space and defence sector, which we believe materially increase Filtronic's potential revenue run-rate; 2) our confidence in the company's ability to convert on that opportunity following our recent site visit; and 3) increasing recognition among investors in the UK, Europe and the US of the potential in the space market (notably relating to the SpaceX IPO)," said Berenberg.

Citi downgraded supermarket chain Sainsbury's from 'buy' to 'neutral' and lowered its target price on the stock from 377p to 335p on Tuesday following the group's "broadly in-line FY26 results" and weaker-than- expected FY27 EBIT guidance.

Citi now expects FY27 retail sales excluding fuel to rise 3.6%, slightly below consensus, with Sainsbury's grocery business still seen growing 4.3%, while Argos was expected to deliver only marginal gains.

The bank also nudged its FY27 operating‑margin guidance lower, reducing its EBIT estimate by 7% to £1.05bn, around 1% below consensus but still within the group's guidance range. Earnings forecasts, on the other hand, were cut more sharply, with FY27 and FY28 earnings per share reduced by 10% and 12%, respectively.

Citi now assumes a £20m contribution from Sainsbury's financial services arm, down from £25m previously.

UBS downgraded its rating on SSP on Tuesday, sending shares in the Upper Crust and Millie's Cookies owner tumbling.

The stock was cut to 'neutral' from 'buy' and the price target slashed to 180p from 245p as UBS cited persisting uncertainty and a worsening capacity outlook.

"Risks to volumes in the travel retail industry linked to the Middle East conflict are increasing," the bank said.

SSP, an operator of food and beverage outlets in travel locations, also owns Ritazza and Le Grand Comptoir, among other brands.