On Tuesday, Berenberg reduced the price target for Judges Scientific PLC (JDG:LN) to £120.00, a decrease from the previous target of £125.55, while maintaining a Buy rating on the stock.
The adjustment follows a trading update for the first half of 2024, which revealed that the company's year-to-date performance has been weaker than anticipated. Judges Scientific also adjusted its full-year 2024 earnings per share (EPS) forecast to be 5-10% below the consensus.
The company's shares experienced a significant drop of 18% on the day of the announcement due to the unexpected trading update. However, the stock has since regained some ground, with a 6% recovery observed.
Despite the near-term challenges, Berenberg remains optimistic about Judges Scientific's mid-term prospects. The firm attributes the current slowdown to temporary market weaknesses and a series of one-off factors.
Judges Scientific's management has acknowledged the subdued trading environment and has set its sights on a full-year performance that falls short of the market's initial expectations. This revision has prompted the firm to anticipate a lower EPS, which is a key indicator of a company's profitability.
The market's reaction to the trading update and the subsequent price target adjustment was swift, as evidenced by the initial sharp decline in Judges Scientific's share price. Nevertheless, the partial recovery suggests that investors may still have confidence in the company's ability to navigate through the current headwinds.
Berenberg's continued endorsement of the stock with a Buy rating, despite the reduced price target, indicates a belief in the company's resilience and future growth potential. This perspective is based on the firm's analysis of Judges Scientific's trading conditions and market position.
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