Avon Technologies PLC (LSE:AVON), promoted back to the FTSE 250 earlier this summer after a four-year break, is one of the most preferred UK defence sector mid-caps for US bank Jefferies.
Following recent contract wins and ahead of full-year results in November, the bank upgraded its 2025-2027 forecasts for the maker of helmets and respirators, leading to an increased share price target.
Analyst Andrew Douglas said: "Not only have we been impressed by how management has executed its turnaround strategy over the last 18-24 months, we also believe the group's medium-term outlook is strengthening and is well-underpinned.
"There's still work to be done, but management is de-risking the equity story and there continues to be significant organic and M&A upside."
Forecasts for pre-tax profits and earnings per share this year have been hiked 18% and for 2026 by 7%.
"Momentum is clearly positive and there continues to be strong top- and bottom-line growth potential,” Jefferies added, noting management’s confidence in opportunities across the Rifletech helmet liner, MITR goggles, CBRN protection, and demand from EU and NATO customers, as well as other international markets.
The note also highlighted a recent £10 million order from the UK Ministry of Defence for Ukraine, scheduled for delivery next year, adding to the order book.
Valuation-wise, Avon trades on a "healthy" 2026 P/E ratio of about 23x, which Jefferies suggested is justified by the group’s progress and outlook.
Jefferies concluded: “There is a lot of positivity at Avon in respect of the opportunities that lie ahead. We remain positive on the group and its evolution, with much more to come, in our view.”