discoverIE Group PLC’s (LON:DSCV) scope for growth makes it a ‘buy’ according to analysts at broker Panmure Gordon, which has initiated coverage of the firm with 615p target price.
The City broker's analysts noted that the customised electronics firm went from a distributor of electronic components to an international designer, manufacturer and supplier thanks to a strategy of acquisitions, with £300mln invested since 2011 and chances for more to come.
Another strong point, according to the Panmure Gordon analysts, is the focus on growing markets and structural shifts such as decarbonisation, which has been driving electrification.
They forecast that these markets are expected to increase annual organic growth by 4% this year and by 3% thereafter.
“We expect design & manufacturing to continue to drive growth and with management's objective to self-fund acquisitions longer term, we expect future acquisitions to become increasingly earnings accretive,” the analysts said in a note to clients..
“As current consensus excludes any future acquisitions, we believe there is significant opportunity for upgrades over the medium term,” they concluded.