(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on electronic connector manufacturer Volex from 510.0p to 440.0p on Thursday but said the firm appeared to be "well on track" to exceed its five-year plan.
Canaccord Genuity said Volex continues to see "robust demand" across all sectors, with full-year 2022 revenues projected to be at least 37% higher year-on-year at $605.0m and underlying operating profit projected to be no less than 28% higher at $55.0m.
The Canadian bank highlighted this as being "a good performance" within a "challenging" operating environment.
However, Canaccord opted to lower its target price to reflect a broad sector de-rating so far this year, stating that at its revised target price, Volex would trade on a 2022 price-to-earnings ratio of 22x and an enterprise value/underlying earnings ratio of 15x - which represents a roughly 10% premium to the blended sector average.
"With a five-year sales CAGR of 15.3% (CY18-23E) and EPS CAGR of 21.4%, we believe this reflects the sector leading growth on offer. We reiterate our 'buy' rating," said Canaccord.
Volex (VLX)