Peel Hunt has upgraded Accesso Technology Group PLC (LSE:ACSO, OTC:LOQPF) to 'add' from 'hold', arguing that the recent sell-off in the shares has been overdone.
The move comes despite a reduction in forecasts following weak trading and the partial loss of a major client contract.
The broker cut its target price to 435p but sees the current share price as offering a more favourable entry point.
The upgrade follows Accesso’s 11 July trading update, which confirmed soft visitor numbers at major US theme parks.
While the company lost the queuing services element of a major contract, Peel Hunt noted the client may still reverse that decision.
Remaining services are seeing price increases, and there’s potential for revenue milestones in the fourth quarter.
Additionally, Accesso has reported a record pipeline, which Peel sees as a source of future upside.
Although the broker reduced its cash EBITDA forecast following the contract change, the stock's post-update weakness led analysts to upgrade their stance, viewing the risk-reward as more favourable at current levels.
Deutsche Bank, in a note, repeated its 'buy' recommendation, although it pegged back its price target to 575p.
Bargain hunters were out in force as the stock rose 6% to 422.74p.