BofA Securities raised its rating on Renishaw, saying the demand recovery cycle is likely to exceed its previous expectations. It also raised its fiscal 2027 EBIT forecast by 22% and significantly increased its target share price.
BofA Securities raised its investment rating on Renishaw by two notches, from “Underperform” to “Buy,” and increased its target share price from 2,779 pence to 5,400 pence. Demand in the semiconductor and electronics sectors is proving stronger than expected, and BofA said it expects further upward revisions to earnings forecasts.
The firm raised its fiscal 2027 EBIT forecast by 22% to £181 million, which it said was 11% above the market consensus. BofA believes Renishaw’s demand recovery cycle is expanding with greater momentum than previously expected.
BofA forecasts growth of more than 30% in the wafer fabrication equipment market in 2027 and 20% growth in the position measurement division. It cited order trends in Japan and growing adoption in the aerospace and defense sectors as factors supporting growth in industrial metrology.
The analysts said the business can expand without additional investment and expect ROIC to improve from 10% in the first half of fiscal 2026 to 14% in fiscal 2028. They also noted the possibility that surplus cash could be returned to shareholders.