Panmure Liberum raised its AOTI Inc (AIM:AOTI) price target by 54% to 114p, and repeated a Buy rating, after first-half revenue and debt beat expectations.
It comes as investors cheered this morning's update, sending the London-listed shares rising around 14%, changing hands at 99.89p.
"AOTI has published a positive trading update, with both revenue growth and net debt better than our expectations," Panmure Liberum analyst Julie Simmonds said in a note.
Revenue increased 10% to $35 million, with underlying growth excluding Arizona at 18%. Veterans Administration sales rose around 15%, while Medicaid revenue outside Arizona climbed approximately 21%.
The broker upgraded its 2026 revenue forecast by 5.6% to $72.5 million and adjusted EBITDA by almost 25% to $6.8 million. Net debt of $6.3 million was well below its $10.4 million estimate.
Panmure’s forecasts exclude potential upside from Medicare reimbursement, which could expand AOTI’s US addressable market around 65-fold to $26 billion. AOTI is a wound-care medical technology company specialising in topical oxygen therapy.
Simmonds, meanwhile, added that AOTI's debt reduction was also ahead of the broker's half-year expectation, with the analyst noted that it was driven by improving VA sales, as those payments are almost immediate, and improving working capital, particularly inventory management.
