HSBC adjusted its outlook on Oxford Instruments Plc (OXIG:LN) (OTC: OXINF), a leading provider of high-technology tools and systems, by lowering the price target to £2.58 from the previous £2.85. Despite the reduction, the firm maintained its Buy rating on the stock.
The revision follows a noticeable decline in the share price of Oxford Instruments, which has fallen approximately 15% over the last two months, underperforming the FTSE 250 index, which saw a marginal decline of 0.9% in the same period. The HSBC analyst pointed to investor caution regarding the company's short-term growth prospects as a reason for the share price drop.
The analyst from HSBC highlighted that while they share the market's near-term concerns, they remain positive about Oxford Instruments' medium-term growth potential and opportunities for self-improvement. The new price target of 2,580p (old: 2,850p) reflects a more cautious stance, with a 4-6% reduction in earnings per share (EPS) estimates.
Despite the lowered price target, HSBC's analyst believes that the stock has approximately 23% upside potential to the new target price. The Buy rating is retained, signaling confidence in the company’s value proposition over the medium term.
However, the analyst also noted that investors might seek additional evidence of the company's current trading performance before adopting a more optimistic view. This suggests that market sentiment could hinge on upcoming financial reports and indicators of Oxford Instruments' operational success.
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