Four banks initiated coverage of DNA sequencing company Oxford Nanopore on Wednesday with positive ratings.
JPMorgan, which started the stock at ‘overweight’ with a 725.0p price target, said Oxford Nanopore was a differentiated player, operating in an attractive segment, with a very strong long-term topline growth outlook.
“ONT targets the DNA sequencing market, where we see sales growing from circa $4bn in 2021, to more than $8.0bn by 2025, further strong growth beyond, with growth driven by increased use for research, pathogen surveillance and population sequencing,” JPM said.
RBC Capital Markets, which initiated coverage at ‘outperform’ with an 800.0p price target, said the company’s technology had unique attributes which had the potential to enable it to disrupt the sequencing market, which itself is growing at double-digit rates.
Barclays started coverage at ‘overweight’ with a 700.0p price target, saying Oxford has a “highly differentiated” technology with significant upside potential to estimates mid-term.
Finally, Berenberg initiated coverage at ‘buy’ with a 662.0p price target.
Analysts at Barclays downgraded their recommendation for shares of Babcock from ‘overweight’ to ‘equalweight’ due to the earnings dilution resulting from its recent disposals.
Furthermore, they pointed out that its financial leverage would remain above the average level for the sector despite those asset sales and others that were set to close soon.
Towards mid-August, the defence engineer sold its Marine division for £293.0m of proceeds at an EV/sales multiple of 2.8 times and its Oil and Gas unit for a further £10m in proceeds.
Combined, those asset sales would cut the company’s earnings per share in 2022 and 2023 by approximately 6% and 12%, respectively, the analysts predicted.
However, Barclays also opted to mark down its target price for the shares from 424.0p to 352.0p.
