On Friday, Stifel increased its price target on DiscoverIE Group Plc (DSCV:LN) shares, a UK-based custom electronics maker, from GBP9.50 to GBP9.75, while reaffirming its Buy rating. The adjustment follows the company's recent fiscal year trading update, which Stifel described as solid, with the company on track to meet its expectations.
According to the firm, DiscoverIE Group's top-line trends were slightly softer than anticipated, partially due to foreign exchange impacts, as well as the Measurement & Control (M&C) division lagging behind the Sensing & Connectivity (S&C) division in volume recovery. However, this was compensated for by stronger-than-expected group margins in the second half of the year.
Stifel highlighted that the company's strategic moves, including high-margin acquisitions and the divestment of a low-margin solar switchgear product line, are expected to contribute to margin improvements in 2025. The firm's profit forecasts for DiscoverIE Group remain unchanged for both 2024 and 2025.
The price target increase to GBP9.75 from GBP9.50 is based on an updated discounted cash flow (DCF) analysis. Stifel has expressed confidence in the company's ability to enhance its financial performance going forward and has maintained a Buy recommendation on the stock.
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