Set-top box maker Pace has accelerated nearly 6% after a positive note from Barclays.
The bank has raised its price target from 320p to 450p and its recommendation from neutral to overweight. It said:
Pace's transformational journey continues and we expect further upside to estimates over the coming year, leading us to conclude valuation remains attractive. Pace is successfully navigating the turbulent set-top box market, focusing on high-value regions and leading with technology. Competition and the cloud limit growth in this market, but Pace has driven and should continue to drive increased profits.
The Aurora acquisition [a supplier of network equipment to cable operators] brings profitable revenue diversification and further adds to the margin story. We see margins expanding more than 10%, beyond Pace's 9% target and therefore see...consensus as too low and valuation still attractive.
Pace is currently 21.4p higher at 379.2p.
