Tuesday, Deutsche Bank (ETR:DBKGn) adjusted its price target on Avon Protection PLC (LON:AVON:LN) (OTC: AVNBF) shares, raising it to GBP 14.70 from GBP 12.00 while maintaining a Hold rating on the stock. The revision follows Avon Protection's interim results, which indicated significant advancements across multiple areas of the business.
The company has demonstrated progress in strengthening its balance sheet and achieving earlier-than-anticipated profitability at Team Wendy. Additionally, there have been operational improvements within the respirator segment.
These positive developments, coupled with the potential for continued enhancements, signal a sustained momentum for the company going forward.
Deutsche Bank's decision to raise the price target by approximately 23% to 1470p (from 1200p) is primarily driven by upgrades to their estimates. Despite the positive outlook, the firm's analyst cited the current market valuation as a factor limiting a more optimistic rating.
Avon Protection's stock is trading at a forecasted September FY26E Price-Earnings Ratio (PER) of 17.3 times the bank's revised estimates, and even 11.3 times the upper end of management's Long-Term Incentive Plan (LTIP) criteria, which anticipates FY26E Earnings Per Share (EPS) of 150c.
The analyst noted that while there is an allure of further opportunities for improvement, the extent to which the company's success is already reflected in the stock price is a consideration. Deutsche Bank will continue to monitor Avon Protection closely for any potential changes that could present an opportunity.
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