Technology group Halma PLC (LON:HLMA) has enjoyed a good run in 2017, up by than a quarter in the year-to-date.
In fact, the run has been too good for analysts at Barclays who have downgraded the FTSE 250-listed company to ‘equal weight’ from ‘overweight’.
It’s not the most bearish note ever written though, with Barclays’ Richard Paige saying that he still expects Halma to make “further strong progress” this year.
“We continue to like the shares from a long term perspective but struggle to see sufficient upside near term to maintain our ‘overweight’ rating on a 12-month view.”
Paige does harbour concerns over central costs though, which he expects to rise by £2.9mln year-on-year to £13.4mln, following on from a £2.2mln jump a year earlier.
For a man that has just downgraded Halma, he’s still pretty bullish on the stock.
“Halma continues to impress with strong organic growth, and the outlook for FY18 appears to be set fair with recovery at Process Safety in evidence in H2, increased contributions from recent acquisitions which disappointed in FY17 and further growth expected at Water.”
The big opportunity for the company, according to Paige, is the potential to increase sales outside of its home UK market.
“One of the key attractions of Halma, in our view, is the opportunity for strong growth overseas, particularly in Asia Pacific.”
Shares in Halma were down 1.5% on the back of the note to £11.12.