Investors in technology outfit Xaar (XAR) finally get a break as the Cambridge-headquartered firm indicates end-markets are better-than-feared.
The stock is down 73% year-to-date as weaker-than-expected ceramics manufacturing in China hit demand for Xaar’s patented industrial inkjet technology. Now the company says performance is stabilising, sparking a 14% share price rebound to 301p.
Chief executive officer (CEO) Ian Dinwoodie says he expects 2014 full-year sales to come in at £108 million. This is better-than-feared, albeit down 20% year-on-year, prompting analysts to upgrade pre-tax profit and earnings per share estimates, though Dinwoodie does caution the top line ‘will not exceed’ £100 million in 2015.
Analyst notes published after the announcement feature two 'hold' and one 'sell' rating. The seller is Investec's Thomas Rands, who has a price target of 365p.
‘We believe investors are more focused on full year 2015 and guidance here has not changed as visibility remains limited,’ he writes. ‘We upgrade our target price to 265p but remain sellers until earnings look to have bottomed.'