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Kepler Cheuvreux initiated coverage on Halma Plc. (LON:HLMA:LN) (OTC:HLMAF) with a buy rating and a price target of GBP34.10, citing the company’s strong market position and consistent profitability. The stock currently trades near its 52-week high of $43.35, with InvestingPro data showing a robust financial health score of "GOOD" and impressive gross profit margins of 100%.
The research firm highlighted Halma’s operations in regulation-heavy and niche end-markets, which create high barriers to entry and drive demand for safety-certified, mission-critical products. These factors contribute to customer loyalty and reinforce the company’s market leadership position. With a beta of 0.61, InvestingPro analysis indicates the stock generally trades with low volatility, reflecting its stable market position.
Kepler Cheuvreux noted that Halma’s market advantages enable strong pricing resiliency and operating margins above 20%. The firm also pointed to Halma’s capital-light, high-return business model that supports strategic and disciplined, value-accretive mergers and acquisitions.
With a strong balance sheet and robust M&A pipeline, the research firm projects that future unannounced deals could drive an earnings per share compound annual growth rate of 11.7%, exceeding the consensus estimate of approximately 8%.
Kepler Cheuvreux also emphasized Halma’s resilience to macroeconomic pressures, citing less volatile demand and strong cost pass-through capabilities, along with superior growth outlook, strong cash flow, and robust margin and return profile.
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