Berenberg raises target price on 'top pick' XP Power

Analysts at Berenberg hiked their target price on power supply manufacturer XP Power from 5,945.0p to 6,050.0p on Thursday following the group's "very strong" interim results earlier in the week.

Berenberg highlighted that XP Power's first-half results revealed that orders were up 17% year-on-year on a constant currency basis, despite "an exceptionally tough" comparative, and that revenues were 23% higher year-on-year.

The German bank noted there was "continued strong demand" in semifab and industrial technology, more than offsetting the anticipated reversal of Covid-19-related healthcare orders.

Despite the "continued strong demand", Berenberg believes nervousness from some investors relating to the semiconductor cycle had caused shares to underperform the sector year-to-date.

"We feel this is unwarranted and overlooks the near-term momentum, improved cyclical resilience and long-term secular growth exposures," said the analysts, who reiterated their 'buy' rating on the stock and reinstated XPP as a "top pick" in the UK industrials sector.