DiscoverIE Group PLC was given a ‘buy’ rating by broker Shore Cap, as well as also receiving positive outlook expectations from finnCap following its first-half statement on Thursday.
Shore Cap noted that the company has been more successful than most of its peers at passing on increased costs to customers, as discoverIE confirmed it has been trading in line with its own full-year expectations.
The designer and manufacturer of specialised electronic components jumped 7.2% to 671p on Thursday afternoon following the “positive” statement and favourable responses from brokers.
Finncap made no changes to its forecasts or target price but highlighted that upgrades are possible if the current performance continues.
Shore predicted £414mln revenue for FY23, implying 9% growth year-on-year.
It added that, under a bullish scenario with growth being sustained at a similar trajectory in the second half, earnings per share (EPS) for the full year could be 15-20% ahead of its current 32.4p EPS forecast, which is in line with consensus.
“DiscoverIE’s proven growth strategy focused on long-term, structurally growing markets across Europe, North America and Asia and a diversified customer base continues to deliver despite the difficult macro background,” Guy Hewett at finncap noted.
Group sales in the six months to 30 September grew by 23% at constant exchange rates compared with the same period last year, with organic revenue up 14%.
Orders in the first half were stronger than expected and the order book at September-end hit a record £257mln, up from £224mln at the end of March and 21% higher than a year ago.