Today's trading update has lead analysts to upgrade their forecasts.
Companies: XP Power Ltd.
XP Power (LON: XPP) has released a promising trading update this morning which has driven share prices up 7%, continuing the strong growth the stock has experienced this year so far.
The update said Q3 trading has been "robust", with Revenues for the nine months to September up 34% on the same period last year, while order intakes for the same period have increased 44%. On a constant currency basis, these were 21% and 30% respectively.
Management noted the continued growth in North America was the driver for the spike in orders.
The Group also acquired Condel during Q3, with Management commenting:
"The acquisition will enable XP Power to provide its existing customers with a comprehensive product offering in Radio Frequency power supplies, increasing our addressable market and further expanding our revenue base."
As a result of the strong FY17 so far, the update went on to say:
"The Board now anticipates the Group’s performance for the full year will be ahead of its previous expectations outlined at the time of the Group’s interim results on 31 July 2017."
The Group will now issue a Q3 dividend of 18p, bringing the total dividend for the first three quarters of 2017 to 49p per share, up 9% for the first three quarters in 2016.
Edison today released a note on the Group, upgrading their forecasts as a result of the stronger than expected trading update, saying:
"We revise up our revenue forecasts to reflect much stronger than expected trading in Q3, which results in normalised EPS upgrades of 5.7% in FY17e and 7.1% in FY18e."
Shares in XPP were trading at 3065p, up from Friday's closing price of 2870p.
Edison also noted in their research note that:
"The stock is up 62% year to date and 17% in the last three months, reflecting multiple earnings upgrades over the course of the year."
XPP currently trades at a PE ratio of 21x versus the industry median of 17x, with a market cap of £552m.
