Berenberg raises target price on Volex following H1 update

(Sharecast News) - Analysts at Berenberg lifted their target price for Volex from 700p to 750p on Tuesday, as they reiterated a 'buy' rating on the stock and said last week's halfyear trading update underscored the group's broadbased momentum and accelerating margin progress.

Berenberg said Volex delivered another strong performance in the six months ended 30 September, with organic revenue growth of 21% and robust contributions across all five core endmarkets. EV exposure continued to expand, helped by marketshare gains with the group's largest customer and rising content on new platforms, while complex industrial technology benefited from a $10m revenue uplift ahead of a US manufacturing consolidation. Data centre growth normalised after last year's surge, but Berenberg said structural demand remained "highly supportive".

The German bank highlighted ongoing margin expansion driven by mix, operational efficiencies and highermargin M&A, noting that progress was running ahead of Volex's 12% mediumterm target. Its updated forecasts now assume 23% EBIT growth in FY27, well above the roughly 15% CAGR required to meet the group's goals.

Berenberg said secondhalf revenues should be broadly stable and that Volex expects FY27 underlying operating profits to land at the upper end of the current $146m to $153m consensus range. It also raised its EPS estimates by around 5% and said recent shareprice weakness looked overdone.

Reporting by Iain Gilbert at Sharecast.com