Halma Share Price Target Raised, But Analyst Expects De-Rating

Jefferies raised its price target for Halma plc (LON: HLMA) to 2,200p from 1,950p in a note Thursday following the company’s strong financial performance in the first half of its fiscal year 2024/25.

However, the investment firm has maintained its Underperform rating on the stock, citing potential headwinds in the second half of the year.

Halma recently announced record half-year results, with revenue surpassing £1 billion for the first time (£1.074 billion), marking a 13% increase year-on-year.

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Adjusted earnings before interest and taxation (EBIT) grew 17% to £222.5 million, while statutory profit before tax rose 16% to £174 million.

The interim dividend was also raised by 7% to 9p per share, reflecting management’s confidence in the group’s prospects.

Despite these achievements, Jefferies noted concerns over Halma’s guidance, saying it expects some de-rating of the shares as revenue and profits from its Photonics division are likely to stagnate in the second half of fiscal 2025.

Even so, Halma’s Group Chief Executive, Marc Ronchetti, stated: “The strength of our first half performance means that we are well placed to deliver our existing guidance for the 2025 financial year.

“Therefore, while we continue to experience varied conditions in our individual companies’ end markets, for the year as a whole we expect to deliver good organic constant currency revenue growth, and an Adjusted EBIT margin of around 21%, in the middle of our target range.”