Filtronic PLC (LSE:FTC) shares may have fallen after its latest trading update, but Berenberg thinks the market overreacted.
The broker has kept its 'buy' rating and 196p price target on the AIM-listed microwave technology group, arguing that the company’s position in space communications continues to strengthen.
The stock dropped 7% following last week’s AGM statement, even though management reaffirmed full-year guidance and highlighted several encouraging signs.
Berenberg analyst Jon Byrne said investors may have been hoping for an upgrade, but noted that Filtronic tends to save those for major contract announcements, such as a £32.5 million order in June.
Adjusting for a 10% currency headwind from a weaker dollar, the company could even be on track to beat forecasts on a constant-currency basis.
A key highlight was the growing relationship with SpaceX, which has “broadened into new areas” and saw the group's largest ever single order, of over £47 million in August.
That, Berenberg said, signals potential new orders beyond Filtronic’s existing E-band amplifiers.
The bank also pointed to the development of next-generation products using gallium nitride, a semiconductor that delivers 20 times the power of older materials, opening opportunities in space ground stations previously beyond reach.
Filtronic’s sales pipeline remains healthy, supported by new customers and a broader product range. The broker expects revenue to grow about 15% a year between 2026 and 2028, with earnings rising even faster.
With net cash, strong margins and a growing foothold in the space and defence markets, Berenberg sees the recent weakness as a chance to buy into what it calls “the UK’s space play”, a business whose technology is quietly becoming mission-critical for a new generation of satellite networks.