RBC Capital Markets has slashed its price target for Oxford BioMedica PLC (LSE:OXB) to 900p from 1,140p after last week's guidance downgrade, while keeping its outperform rating on the gene therapy manufacturer.
Charles Weston has cut revenue forecasts by 17% across each of the next three years and trimmed 5 percentage points from his margin assumptions.
The reductions follow contract and site delays that pushed the analyst's revenue expectations to the right rather than out of the model altogether.
OXB cut its full-year revenue guidance to between £180 million and £200 million earlier this month, a reduction of roughly £40 million, blaming three programme deferrals, a client's regulatory timing shift and a six-month delay to bringing its Durham site in North Carolina up to good manufacturing practice standard.
Weston now models revenue of £188 million this year, rising to £299 million by 2028, with earnings before interest, tax, depreciation and amortisation of £8.7 million improving to £59.6 million over the same period.
The stock closed at 505p on Friday, valuing the company at £611 million.
Credibility the sticking point
The analyst acknowledged that guidance credibility has taken a knock, adding that confidence will need to be rebuilt.
He sees nothing to alter his view of the company's positioning in a market forecast to double to about $10 billion by 2031.
The pipeline of unweighted client opportunities stood at $713 million at the end of June, still up around 30% on a year earlier, with 19 new clients signed so far this year at a record pace.
What to watch
Interim results on 22 September are the next catalyst, at which point Weston expects to see greater order coverage of the guidance range.
The 900p target blends the bottom end of peer sales multiples with an EBITDA-based approach, applied to 2028 and 2029 forecasts and discounted back at 20% a year.
In afternoon trading, the stock was off 2.5% at 492.26p.
