Last Thursday's results from biodegradable plastic technology group Symphony Environmental Technologies PLC (LON:SYM) were ahead of the house broker's expectations.
Cantor Fitzgerald said the group is “comfortably on track to meet our full year estimates”.
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Half-year revenue rose 14.4% year-on-year to £3.69mln; Cantor is predicting full-year revenue of £7.5mln.
“The shares have reacted positively in the past year to a run of strong news flow but at this early stage, we are retaining a cautious approach to short term estimates, with small upgrades now. There is, however, a strong sense that the development phase is nearing an end and that the risks have been substantially reduced,” the broker suggested.
For the time being, the broker is keeping its recommendation under review but has increased its target price from 11.5p to 12.5p. The shares currently trade at 10.25p.
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Cantor Fitzgerald said the revenue growth was driven by stronger-than-expected sales of Symphony's d2w controlled-life plastic additives, but implied that future growth may receive a more significant contribution from the d2p (designed-to-protect) additives, after the first half saw the launch of two new products containing the additives: anti-microbial plastic gloves in the UK and plastic water pipes in the UK.
“It is early yet, but these launches represent the beginning of the commercialisation process for d2p products in which the company has invested heavily,” the broker noted, as it nudged up its estimates for the current financial year and the next.