Analysts at Berenberg hiked their target price on simulation and testing outfit AB Dynamics from 1,530.0p to 1,800.0p on Friday after the group’s full-year results pointed to strong organic revenue and profit growth.
Berenberg said AB Dynamics’ solid full-year results were supported by recent investments in its capabilities and a recovery in customer activity since the Covid-19 pandemic.
The German bank, which reiterated its ‘buy’ rating on the stock, also stated that while it continues to believe in AB’s long-term growth story, it also noted that management had signalled ongoing investment into new product launches, as well as its ABD Solutions and AB Simulation divisions.
“Despite our investment case remaining unchanged, we factor in slower growth in driving robots, higher investment, and an increasing tax rate along with the UK corporation tax rate, which reduces our FY 2024/25E EPS estimates by 7.5%/9.7% respectively,” said the analysts.
However, while Berenberg highlighted that it did not model any benefit from AB’s investments, if these do bear fruit, it reckons there could be “material upside” to its base-case estimates for outer years.
Reporting by Iain Gilbert at Sharecast.com
