(Sharecast News) - Electrocomponents rallied on Tuesday as JPMorgan Cazenove upped the stock to 'overweight' from 'neutral' and hiked the price target to 1,103p from 799p, arguing that it's a "great" company with an "OK" valuation.
JPM noted that trading in the third quarter bounced back quicker than anticipated, with 8% group like-for-like growth, versus a 4% decline in the second quarter.
"This will be offset by higher freight and other costs in the short-term; however, we regard these as temporary, whereas the market share gains are likely permanent," JPM said.
"Longer-term, the combination of its digital offering in a post-Covid world (circa 62% of revenues), and an emerging M&A strategy, with 3-4x the number of active M&A opportunities versus two years ago, means we can see the stock re-rating towards circa 30x price-to-earnings."
This compares to c21x FY2 P/E currently.
At 1040 GMT, the shares were up 3.8% at 979p.
8 Jan 2019 12:17
LONDON MARKET MIDDAY: FTSE 100 Rallies As US-China Talks Continue
LONDON (Alliance News) - Gains for London stocks accelerated as Tuesday's session progressed amid ongoing US-China trade talks, with the FTSE 100 racking up nearly 75 points despite Wm
Read more