Numis Securities has upped its target price for DiscoverIE Group PLC (LON:DSCV) after raising estimates following the recent news of the £23.7mln acquisition of Santon, a designer and manufacturer of patented direct current switches.
In a note to clients, Numis’s analysts said: “We view this as an attractive acquisition, significantly enhancing the Group's exposure to the structurally growing renewables (particularly solar) market, as well as boosting geographic diversification (particularly Asia).”
READ: discoverIE buys Dutch solar power components specialist
The City broker’s analysts upgraded their full-year 2019-2020 earnings per share forecasts for the customised electronics supplier – formerly known as Acal PLC - by 7-8%, leading them to increase their share price target to 455p.
With the shares currently trading at 395p each, the Numis analysts reiterated an ‘add’ recommendation on DiscoverIE.
They concluded: “The shares now trade on a FY19E PE of 14.8x and EV/EBITA of 10.9x, which we view as undemanding given the cyclical and structural tailwinds to which DiscoverIE is exposed.”