Broker tips: Kewill, Immunodiagnostic

Strong full year results from in-vitro diagnostics group Immunodiagnostic Systems (IDH) have prompted stockbroker KBC Peel Hunt to consider raising its price target for the stock, which currently stands at 260p, not far above the prevailing market price."Finals show revenue up to £25m (up 51%) driven by strong growth in flagship Vitamin D tests. EPS [earnings per share] up 22% to 16.2p in line with our expectations, which were at top end of consensus," said KBC analyst Paul Cuddon, who rates the shares a "buy".KBC expects sales of IDH's automated immunonalyser, the IDS iSYS, released in March, "will be the main revenue driver in the years ahead as the Vitamin D market becomes increasingly automated," a view with which Panmure Gordon concurs."The growth in the vitamin D market continues to underpin the investment thesis in Immunodiagnostic Systems and we expect the company to capture a larger share of the market following launch of its automated product IDS iSYS," Panmure Gordon said in a research note."IDH's shares have risen sharply since our initiation in February however the company still trades at a 24% discount to peers on 2010E earnings. We therefore keep our buy rating however our target price is under upside review," KBC said.Broker KBC Peel Hunt reckons the worst is probably over for Kewill Systems with new business wins and cost savings set to ensure a better performance in 2010.The broker notes that international trade is weak, with Germany the only major territory to show significant revenue growth (+19%), and this is affecting the company's sales cycles.Management does not foresee overseas trade picking up much until the second half of the current financial year so the company's projected cost savings, "including $1.9m in the US alone, are material in the current environment," KBC analyst Simon Strong reckons.KBC believes the outlook for 2010 is robust, with the two sizeable contracts wins with Maersk and NYK Logistics, along with the regulatory drivers in place to ensure adoption of electronic customs documentation, providing a bedrock for earnings."Stock has rallied but still undervalued. 2009 was probably as tough as it gets," Strong believes. KBC has Kewill on its buy list with a price target of 85p, up from 70p prior to Monday morning's results.