Avon Technologies: More Positive About The Future

2025-04-20 11:00:56 ET

Summary

• Avon Technologies is expected to see >10% revenue growth in FY25, driven by strong sales of FM54 respirators and ACH GEN II helmets for the US Department of Defense.
• Despite some cost pressures from facility closures and production ramp-ups, profit margin guidance has been adjusted to 12%, with an 80% cash conversion expectation.
• The stock is currently overvalued for FY25, but long-term growth prospects remain strong, with significant upside anticipated in 2026 and 2027.
• I maintain a buy rating, noting potential price weakness to $15.67 in case of market pressure, but overall upside is backloaded beyond FY25.

In January, I covered Avon Technologies plc ( AVNBF ) after the stock had reached my price target. In that report, I increased my price target to $22.06. Since then, the stock lost 3% of its value while the S&P 500 declined 11.9%....

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