DiscoverIE Group PLC (LON:DSCV) has had its share price target upgraded by Berenberg after the broker was impressed with last week’s results.
The German broker said the electronic component supplier’s profits were 7% ahead of its expectations while net debt was 19% lower than forecast.
“Trading so far in Q1 has illustrated the resilience of the business model, and new long-term targets demonstrate management’s ambitions to become a higher-growth, higher-margin business,” Berenberg added.
The company had a record order book of £159mln at year-end, with signs of sequential improvement in June.
Management is expecting a pick-up in orders towards more normal levels to begin going into the second half.
“While COVID-19 uncertainty remains elevated, we are confident that when conditions do recover, discoverIE will be well placed to outperform, as it has done in previous cycles,” said Berenberg.
The broker’s new price target is 590p and ‘buy’ the investment rating.