Bank of America reinstated coverage of Halma plc with a Buy rating. Analysts set a new price target of 4,600 pence. This target suggests a potential upside of approximately 20%.
Exposure to the data center market through photonics drives the positive outlook. BofA projects an 11% organic compound annual growth rate through 2029. Demand for optical switches in data center photonics serves as a primary growth catalyst.
The Avo Photonics portfolio company is expected to deliver significant results. Analysts forecast organic growth for Avo at 34% in fiscal 2027. Projected growth reaches 32% for fiscal 2028. These forecasts sit well above current consensus estimates.
The bank’s valuation applies a premium to Halma’s non-photonics businesses. It applies a slight discount to the photonics segment relative to industry peers.