Shore Capital has maintained a 'buy' stance on hVIVO PLC (AIM:HVO), underscoring the company's potential despite its contract setback announced earlier Friday.
The investment case rests on hVIVO’s ambition to deliver revenues of £100 million in financial year 2028, an objective increasingly achievable due to the diversification away from lumpier Human Challenge Trial (HCT) contracts.
ShoreCap suggests management should soon reaffirm or reframe these ambitions to regain investor confidence.
Although hVIVO shares have not significantly recovered following a warning earlier this year, continuing to trade at a notable discount to industry peers (approximately nine times financial year 2026 estimated enterprise value to EBITDA), this persistent undervaluation may heighten the likelihood of acquisition interest.
Shore Capital highlights that hVIVO operates within a fragmented market ripe for consolidation, and given the distinctive nature of its HCT business, it could attract a premium from the right buyer.
"Sustained weakness in the share price could increase the potential of bid interest materialising," ShoreCap's analysts noted, emphasising hVIVO’s unique market position as a valuable asset within the consolidating sector.
Peel Hunt remains supportive with a 21p price target, a significant premium to the current 8.64p for which the stock is currently changing hands.
In a note to clients, the broker said: "We note that hVIVO still sees a high probability that opportunities in advanced discussions could land in late 2025 and backfill/mitigate this impact in FY26."