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Abcam warns full-year revenues to miss forecasts due to coronavirus pandemic; RBC upgrades

Last updated: 10:39 20 Apr 2020 BST, First published: 08:26 20 Apr 2020 BST

Abcam - Abcam warns on revenue due to coronavirus pandemic
RBC's analysts believe there is "100% implied upside" in the stock over the next three years.

Abcam PLC (LON:ABC) has warned that its revenue for the year to end June 2020 will be £14mln-16mln lower than expected as the coronavirus pandemic spreads to impact across its markets, but shares still rose on Monday as RBC Capital upgraded its rating on the stock.

The manufacturer of protein research tools said it has boosted its supply chain to meet higher demand for existing products used for research on the virus.

It also joined over 20 partnerships focused on vaccine and treatment development and is donating ‘critical’ supplies, such as equipment used for testing.

The AIM-listed firm pointed out that it has not furloughed staff nor is it receiving state support.

As of Monday, the group said it had £80mln in the bank plus a £200mln revolving credit facility.

RBC ups to 'outperform'

In a note to clients, analysts at RBC Capital Markets upgraded Abcam's rating to 'outperform' from 'sector perform', however, based on "the sustainable acceleration in revenue growth that we believe is achievable".

They kept their one-year price target unchanged at 1,300p but said they believe there is "100% implied upside" in the stock over the next three years.

"Sentiment will improve when we have more clarity on revenue recovery, and today’s commentary that customer activity is increasing should be helpful," the analysts said.

"As management shares the early impact of strategic initiatives, particularly traction in new product areas such as proteins and cell lines, the market’s confidence in accelerating longer-term growth should also improve," they added.

Abcam shares rose 3.6% to 1,198p on Monday morning.

-- Adds broker's comment, updates share price--

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