Cavendish has reiterated its price target of 26p for Kromek Group PLC (AIM:KMK) as the company’s Capital Markets Day kicks into gear.
According to the broker, the gathering will highlight the opportunity ahead in its two core growth areas: Advanced Imaging and CBRN (chemical, biological, radiological and nuclear) detection.
The firm’s technology, based on cadmium zinc telluride (CZT), sits at the centre of both divisions.
The January deal with Siemens Healthineers, which involved a $25 million payment and a transfer of manufacturing capability, has already transformed the balance sheet and validated Kromek’s position in next-generation medical imaging.
In Advanced Imaging, Kromek is targeting the shift to CZT detectors in both SPECT and CT scans – the latter expected to grow sharply in the next five years.
Meanwhile, the CBRN unit is set to benefit from government stockpiling, EU and NATO demand, and new security contracts in the UK and US.
Management is aiming for £60 million in medium-term revenues and a 30% EBITDA margin. Cavendish is not changing its forecasts for now, but says investors now have a “framework against which to judge the company”.
The shares, up 31% in the year to date, were steady at 6.57p.