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(Sharecast News) - Analysts at Berenberg lowered their target price on electronic components manufacturer DiscoverIE from 1,150.0p to 920.0p on Thursday but stated they still sensed "an opportunity" for investors.
Berenberg noted that DiscoverIE issued "a strong set" of FY 2022 results earlier in the week, with organic order growth up 36% year-on-year, organic revenue growth up 18%, and underlying margin progression of 70 basis points year-on-year to 10.8%.
While Berenberg was mindful of the "uncertain macro backdrop", it still feels DiscoverIE is "well placed" and reiterated its 'buy' rating on the stock despite the target price reduction.
The German bank stated structural growth drivers across the group's key end-markets, including renewable energy and medical, should grow ahead of industrial production, while the more cyclical custom supply division being sold off during the recently wrapped up trading year and the acquisitive side of the business being "historically accelerated" in times of softer organic growth as "more attractive" M&A opportunities come to market.
However, despite both this and a record full-year 2022 performance, DiscoverIE shares were among the hardest hit in the sector, de-rating 42% year-to-date.
"Against an uncertain backdrop, we believe it is important to emphasise the resilience of DiscoverIE's business model," said Berenberg.
Reporting by Iain Gilbert at Sharecast.com
