Berenberg hikes target price on Electrocomponents
Analysts at Berenberg hiked their target price on industrial and electronics products distributor Electrocomponents from 575.0p to 815.0p on Monday, highlighting the acceleration of some pre-existing trends.
Berenberg said Covid-19 was accelerating pre-existing trends across many industries and stated that online distribution was "no different".
The market share gain story that has been central to the Electrocomponents investment case over the past few years has gathered momentum, and we have seen that play out in the first six months of FY 2021," said Berenberg.
The German bank was of the opinion that Electrocomponents continued to be "well placed" to navigate the ongoing uncertainty for two key reasons.
Firstly, the analysts stated that large global distributors had the ability to "flex their distribution and supply footprint" and added that an online business model also offered "resilience" through the Covid-19 pandemic.
"We therefore view ECM as a compelling way to play a potential recovery in the global industrial end-markets," concluded Berenberg, which also reiterated its 'buy' rating on the stock.