LED lighting group Luceco PLC (LON:LUCE) received a broker downgrade even though it expects profits for both 2019 and 2020 to be ahead of market expectations.
In an update, Luceco said adjusted operating profit is expected to be in a range of £17.5mln to £18mln for 2019, up from £8.5mln in 2018, while this year should see between £20mln and £21.5mln.
In the year to 31 December, revenue rose 5% to £172mln, with slower growth in the second half due to stronger comparatives in 2018 and “more hesitant” demand in the UK due to uncertainty.
Analysts at Peel Hunt more than doubled the target price to 151p from 96p but lowered their rating to ‘add’ as the share price has already risen to within touching distance.
“LUCE’s earnings and rating have now nearly fully recovered, although we suspect financial year 2020 could also beat our expectations,” analysts said in a note.
“It will take some time for that to become evident, and the stock has already performed well while we are more conservative about the macro environment,” they added.
Shares were up 5% to 146.8p on Tuesday morning.