Berenberg hikes target price on Filtronic following site visit

(Sharecast News) - Analysts at Berenberg hiked their target price on communications equipment designer and manufacturer Filttronic from 213p to 360p on Tuesday, stating a recent site visit had reinforced the company's potential.

Berenberg said Filtronic continues to be "one of the best-positioned pure-play space names" in the UK market, in its view, noting that recent months have seen "a significant uptick" in sector newsflow, driven by "increasingly frequent" satellite launches and greater investor interest in the network services that will evolve to support this growth.

The German bank, which has a 'buy' rating on the stock, noted that the period has also seen developments for Filtronic, including new customer contracts and product launches, which it believes has increased its potential growth.

Berenberg added that in order to support its broader understanding of the sector and the specific Filtronic nuances, it had visited the firm's new headquarters and manufacturing facility at the North East Technology park in County Durham.

While Berenberg said no material information was disclosed, it stated it had come away "more confident in the range and scale of Filtronic's ambition and its potential". In particular, Berenberg stated a presentation from Filtronic's chief commercial officer had highlighted the group's "evolving go-to-market strategy", which it highlighted had led to "record order book coverage and a significant increase" in new customer numbers.

"Our price target increase reflects a number of factors, including: 1) recent contract wins with key customers across the space and defence sector, which we believe materially increase Filtronic's potential revenue run-rate; 2) our confidence in the company's ability to convert on that opportunity following our recent site visit; and 3) increasing recognition among investors in the UK, Europe and the US of the potential in the space market (notably relating to the SpaceX IPO)," said Berenberg.

Reporting by Iain Gilbert at Sharecast.com