Pace has jumped more than 4% following an upgrade from Espirito Santo on hopes of a recovery at the set top box maker.
The company issued a string of profit warnings last year, including a $9.5m hit when floods in Thailand disrupted its supply of hard-disk drives. A boardroom shake-up saw chairman Allan Leighton appoint the company's US boss Mike Pulli as chief executive. Following a recent positive update from the company, Espirito analyst Vijay Anand said:
Shares have fallen by around 60% since the start of 2011, due to poor business performance along with lack of investor confidence in the previous management's execution capabilities. In our view, the unwinding of the hard disk drive supply shortage and the new management's corrective actions to improve operational performance point to a potential recovery. We raise our fair value target price to 110p (previously 96p) and upgrade to buy from neutral.
The news has lifted Pace 3.25p to 82.25p. The company has also been suggested as a possible takeover target recently, with Cisco one name mentioned as a potential predator.
Meanwhile Psion, the maker of handheld computers, has slipped 1.75p to 55.25p after its annual meeting statement. The company said strong performances from north America, France and the UK had been offset by tougher trading conditions elsewhere. In a sell note Lorne Daniel at FinnCap said:
There is not much here to change our general concerns over spending on expensive units in difficult economic conditions and in the face of strong competition from the likes of Motorola, Intermec and a plethora of other manufacturers in the same space.
