On Thursday, Deutsche Bank adjusted its price target on Oxford Instruments Plc (OXIG:LN) (OTC: OXINF), a leading provider of high-technology tools and systems for industry and research, to £28.50 from the previous £30.00, while maintaining a Buy rating on the stock. The revision follows the anticipation of a trading update from the company, which is expected to confirm that full-year expectations remain unchanged.
According to the analyst from Deutsche Bank, despite the unchanged performance expectations for the full year, Oxford Instruments is likely to face a foreign exchange (FX) profit headwind of approximately £1.5 million to £2.0 million. This suggests a year-over-year profit headwind of around £8 million in the fiscal year 2025. Notwithstanding these headwinds, the company’s sales are projected to be approximately 10% higher year-over-year in the first half, marking a robust performance especially given the challenging market conditions.
The order intake has also seen a modest increase, with a reported growth of about 3% year-over-year on a constant currency basis. Despite the reduction in the price target, the analyst expects a positive market reaction on the same day. The adjustment reflects a minor decrease in estimates and a slight contraction in the average enterprise value to earnings before interest, taxes, and amortization (EV/EBITA) multiple of Oxford Instruments’ international peer group.
The firm’s stock has experienced a nearly 25% decline over the past four months. However, even with the revised price target, Oxford Instruments is trading at a significant discount compared to its international peers, with a revised calendar year 2025 EV/EBITA of 12.3 times and a price-to-earnings ratio (PER) of 17.4 times, excluding cash. This is in contrast to its peers, which average 20.2 times and 23.5 times, respectively. The new price target of 2,850 pence is based on a calendar year 2025 EV/EBITA of 18.2 times, which accounts for the adjustments mentioned by the analyst.
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