Gooch & Housego - strong AGM Update sees broker up TP to 890p (680p), shares now 756p

Mark Watson-Mitchell - 27.02.2026

This morning, ahead of its AGM later today, Gooch & Housego (LON:GHH), the photonics technology business, has issued a strong Trading Update, with its order book growing to £168.3m as of today, up from £142.3m at end-September last year, driven by increased demand from Aerospace & Defence customers.

The company also noted an improvement in Industrial markets, with signs of recovery in semiconductor manufacturing expected to continue into the second half of 2026, and resolved supply chain challenges in Life Sciences, anticipating production ramp-up.

Net debt reduced to £28.0m by January 2026 from £29.9m in September 2025.

The Board's expectations for the current year remain unchanged, supported by the robust order book and pipeline of contracts.

The Business

This photonics technology business is based in Ilminster, Somerset, with operations in the USA and Europe.

It is a world leader in its field, the company researches, designs, engineers and manufactures advanced photonic systems, components and instrumentation for applications in the Aerospace & Defence, Industrial, Life Sciences and Scientific Research sectors.

World-leading design, development and manufacturing expertise is offered by the group across a broad range of complementary technologies.

Management Comment

CEO Charlie Peppiatt stated that:

"The strong order book growth since the start of the new financial year increases our confidence in the Group's full year out-turn.

The strategic acquisitions of Global Photonics and Phoenix Optical in FY2025 have delivered strong customer demand, such that capacity at both sites is being increased.

We continue to remain focused on operational improvements and, whilst some macro-economic uncertainty remains, we are making good progress in achieving our strategic ambition of delivering mid-teen returns on sales in the medium term."

Broker's View

At Cavendish Capital Markets, analyst David Buxton commented that:

"The shares have been strong performers (+62% in 3 months) with strong results in December and the shares playing catch up with defence peers that had rerated earlier.

The shares currently trade on a FY27E P/E of 13.9x, and an EV/EBITDA of 7.8x, which looks cheap versus many peers.

We increase our target price from 680p to 890p, based on a target P/E of 16.4x, offering further upside potential as it continues to deliver on its KPIs and with improving market momentum."

My View

These shares, at 756p, obviously have significant upside.

(Profile 09.12.24 @ 490p set a Target Price of 600p*)

(Profile 11.10.25 @ 586p set a Target Price of 680p*)

(Profile 20.02.26 @ 740p set a Target Price of 800p)