Renishaw PLC shares climbed 5.2% on Wednesday after the precision engineer delivered a sharp acceleration in sales growth in the second quarter of its financial year.
Profits were dented by sharp currency moves, but analysts said adjusted operating profit for the half was broadly in line with expectations, masking underlying momentum.
The FTSE 250 group reported constant currency sales growth of 11.5% in the first half, with UBS estimating that implies a jump to 20.5% in the second quarter from 2.8% in the first.
Growth was broad based across divisions and regions, with strength in semiconductor, consumer electronics and defence markets.
Order book commentary was also positive, pointing to strong intake.
Renishaw has upgraded full-year guidance, now expecting revenue of £740-780 million and adjusted profit before tax of £132-157 million.
Foreign exchange movements created a 360 basis point margin drag year on year, UBS said, with constant currency adjusted operating profit rising 50%, helped by £9 million of cost savings and strong operating leverage.
UBS estimates the midpoint of new revenue guidance implies around 4% upside to consensus operating profit, rising to as much as 14% at the top end.
The Swiss bank raised its price target to 4,750p from 4,400p, arguing the company is early in a re-acceleration cycle.