On Friday, Deutsche Bank adjusted its stance on XP (NASDAQ:XP) Power (XPP:LN) (OTC: XPPLF), downgrading the stock from Buy to Hold and setting a new price target at £13.40. The revision followed the release of the company's interim results, which revealed a challenging first half of the fiscal year 2024. XP Power reported group revenue of £127.1 million, a decline of 21% year-over-year on a constant currency basis, the decrease was 18%.
The delivery of adjusted EBIT (earnings before interest and taxes) of £13.5 million for the first half was accompanied by a forecast suggesting a similar operating performance for the second half of the fiscal year. This outlook includes the anticipated effects of cost-saving initiatives aimed at reducing the operating cost base by approximately 17% compared to the previous year.
According to the report, the order intake in the second quarter showed signs of stability, amounting to £44.2 million. This suggests that the demand environment may have begun to stabilize after a period of volatility. Despite this, the overall performance for the first six months has prompted the adjustment in the investment firm's rating and price target for XP Power.
The downgrade reflects the company's interim results and the expectation of continued challenges in the near term. XP Power's financial performance in the first half of the fiscal year 2024, as well as the outlook for the second half, were key factors influencing Deutsche Bank's revised rating.
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