Berenberg hikes target price on Halma
By Iain Gilbert
Date: Thursday 05 Dec 2024
(Sharecast News) - Analysts at Berenberg hiked their target price on safety equipment business Halma from 2,450.0p to 2,700.0p on Thursday as it acknowledged the group's sustainable growth model was in action.
Berenberg previously hosted a fireside chat with Halma's chief executive Marc Ronchetti and chief financial officer Steve Gunning, the main focus of which was on understanding the company's sustainable growth compounding business model, which has delivered a 10-year 12% profit compound annual growth rate, and a 46th consecutive year of dividend growth.
The German bank said the group's corporate purpose, target markets, structural growth drivers and key enablers support a financial guidance framework that seeks to double earnings per share every five years and grow sales by 15% per year through organic and inorganic means, with strong cash flow from 20%+ operating margins supporting ongoing M&A.
Following Halma's "strong organic growth" at its recent FY25 interim results and "a clear strategy being executed well", Berenberg noted that the management team appeared enthusiastic about the opportunity ahead for investors.
"Halma trades on a 30.3x FY 2025 P/E and 23.6x FY 2025 EV/EBIT. While optically fully valued, Halma has demonstrated over many years an ability to deliver strong growth and excellent shareholder returns which we expect to prove attractive to many investors," said Berenberg, which reiterated its 'hold' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com
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