Filtronic – Berenberg put out a 196p Target Price, noting that the ‘sell-off’ is overdone, shares now an attractive 133p

Mark Watson-Mitchell – 04.11.2025

Ahead of last Thursday’s AGM the shares of Filtronic (LON:FTC) were trading at 142p, since when they have eased back to the current 133p.

I consider that the group’s shares should now be advancing to break above the recent 175p High – hopefully to be helped in that progress by news of further contracts.

The Sedgefield-based designer and manufacturer of advanced RF solutions for the space, aerospace and defence and telecoms infrastructure markets, is now capitalised at £290m.

For the AGM the Management stated that:

“The start of FY2026 has seen continued progress, as the Company increases the scalability of the business and capitalises on its long-term growth opportunities.

Filtronic has further strengthened its RF and system engineering teams, positioning the business to execute on the increased pipeline of technology and products that match the developing market opportunities that will drive growth over the next number of years.

Overall, the Group's healthy sales pipeline, increased customer engagement with both new and existing clients across key markets and robust order book leave Filtronic in a good position to meet market expectations for the full year, despite headwinds from weakness of the US dollar against sterling.

Over the longer term, customers are expressing a growing need for high-frequency, secure, and resilient communications infrastructure across many platforms which provide the Group with supportive structural growth drivers across its key markets.

We believe we have exciting products and capabilities to match this growing need.”

Broker Comment

It has been pointed out to me that brokers Berenberg consider that the recent sell-off in Filtronic’s shares has been overdone given the positive catalysts, including a ‘deepening relationship’ with SpaceX.

The broker’s analyst Jon Byrne has a Buy rating on the group’s shares, with a Target Price of 196p.

Byrne said the recent sell-off was overdone given the positivity of the statement a number of encouraging indicators of further order flow, as well as a developing pipeline and new products, together with its ‘deepening relationship’ with Elon Musk’s rocket company SpaceX.

That link-up with SpaceX Byrne suggested has ‘broadened into new areas’ and investors are looking for further order flows for existing and new products.

Byrne stated that:

“We think that this is a positive sign considering the recent conversion of large contracts with SpaceX and the efforts we think that management has made to diversify the customer base.”

My View

Last August it received its largest order, from SpaceX worth £47m, which had been preceded in July by a £13.4m contract from a European Defence Sector Prime.

The group is still at very early stages of its development, however its Order Book indicates that it should be taken with some seriousness right now.

Obviously, this enterprising tech group will see its shares gyrate over the next year or so, reacting favourably to further corporate news of additional contracts.

Berenberg’s Target Price looks to me to be a very easily achievable objective!

The shares, which are now 133p, could beat my 165p aim within weeks and certainly before the Interims in early February next year.

(Profile 04.02.22 @ 11.6p set a Target Price of 14.5p*)

(Profile 04.01.24 @ 21p set a Target Price of 24p*)

(Profile 26.06.24 @ 67p set a Target Price of 80p*)

(Profile 10.02.25 @ 103p set a Target Price of 150p*)

(Profile 19.10.25 @ 130p sets a new Target Price of 165p)

Asterisks * denote that Target Prices have been achieved since Profile publication