Citi upgrades Halma to ‘buy’, says shares no longer include photonics premium.
Citi upgraded Halma to ‘buy’ from ‘neutral’ on Friday and lifted the price target to 4,600p from 3,700p after the company’s results a day earlier.
Halma
12 June 2026 12:35:15
Source: Sharecast
Shares in the safety equipment firm tumbled on Thursday as it posted a jump in full-year earnings but gave a conservative outlook.
Citi said in a research note that Halma shares are no longer pricing in a photonics premiums. "Halma’s FY27 guidance has driven a circa 4% digit upgrade to our FY27 EBIT forecast, meaning today’s more than 15% share price decline has driven a near 20% de-rating in the shares," it said.
"It is of course all about photonics, where the circa 30% growth guided in FY27 is a moderation from the circa 50% seen in FY26."
Citi said comments from the call suggest photonics guidance reflects the order book and ramp-up visibility, "although of course the upwards revision to photonics growth guidance during FY26 points to a history of prudence".
The bank said Thursday’s approximately £2.7bn decline in market cap is equivalent to more than 4x sales for photonics, and de-rates the group from circa 28x EV/EBITA to 23x on FY27, in-line with the 2022-23 average which it sees as the "pre-photonics" norm.
"We continue to expect photonics to remain attractive, and after today’s reaction, the shares no longer include a ‘photonics premium’ and we upgrade to buy."
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