Canaccord Genuity nudges up target price on Volex

(Sharecast News) - Canaccord Genuity nudged up its target price on high-performance power and connectivity solutions manufacturer Volex from 440p to 445p on Friday to better reflect 'strong momentum' detailed in the group's "strong update" last week. Canaccord said Volex's update underscored "the strength of its diversified portfolio" and, in particular, its exposure to structural growth across data centres and electric vehicle infrastructure.

The Canadian bank noted that partnerships with leading global customers helped drive constant currency organic growth of nearly 15% in the nine months to 31 December, while it also pointed out that margins remained "firmly at the top end" of Volex's 9-10% target range, supporting "a small upgrade" to its full-year outlook.

"We've reflected this in our model, lifting FY26E adjusted EPS by 2.9%, with FY27E and FY28E nudging up by 0.9% and 0.4% respectively. Looking ahead, we await Volex's forthcoming strategic target update, where the group is expected to set out new growth ambitions," said Canaccord, which reiterated its 'hold' rating on the stock.

"Given its consistent margin delivery through a period of investment, we would like to see the strategy articulate the company's position as an increasingly value-add global supply chain partner for blue-chip customers reflected in an uplift in its margin aspirations."

Reporting by Iain Gilbert at Sharecast.com