Credit Suisse lowers Spectris target on weakess in China and Germany
Analysts at Credit Suisse on Monday lowered their estimates for the instrumentation and controls manufacturer Spectris due to a raft of factors, including weakness in China and Germany.
Spectris
3,232.00p
16:34 25/04/24
The company’s product line-up includes the Microscan bar-code scanners, which are used in a wide range of applications, spanning everything from electronics and telecommunications to manufacturing automation.
Amongst the factors cited by the Swiss broker are “[negative] read-across from a weak third quarter performance from Danaher in its Test & Measurement business, on-going weakness in academic and mining end markets, a slowdown in China for Spectris and softer conditions in Europe particularly Germany.”
As a result of all of the above, analysts Jonathan Hurn, Andre Kukhnin, Simon Toennessen and Max Yates shaved their group EBITA forecasts for 2014 by 4% to £191m and those for the next two years by 3% and 4%, respectively.
Following on from the above they also reduced their target price on the stock to 2,075p from 2,370p.
Under a ‘bull’ case scenario Spectris would generate EBITA of £200m in fiscal year 2014, in line with the current analysts’ consensus, but under a ‘bear’ scenario it would only see EBITA of £182m – assuming weaker performance by recent acquisitions than included in prior guidance.
Nevertheless, they identified the shares as one of the stocks with the greatest potential under a rebound scenario. They are also trading at a significant 35% discount to its global peer group, Credit Suisse points out.