When Shore Capital Markets initiated coverage on Seeing Machines earlier this month, the broker saw aviation as a nascent opportunity for the AIM-quoted vision-based autotech company.
Yesterday’s announcement that Seeing Machines has partnered up with Raytheon subsidiary Collins Aerospace in a US$10mln (£8mln) collaboration appears to have vindicated this line of thought.
Shore Cap has increased forward revenue guidance by up to 6%, with analysts noting that the tie-up with the “mega tier-one avionics supplier” will likely result in significant royalties that will outpace royalties in the automotive sector.
“This makes us even more bullish on Seeing Machines,” said analysts, giving the group a buy rating with a 12p target price.
At the time of writing, Seeing Machines shares were changing hands at 5.91p, marking a 100% upside on Shore Cap’s guidance.