DAVY VIEW

Our key takeaway from Oxford Instruments’ (OXIG) interim results was the commentary from new CEO Richard Tyson about the scope for operational improvements and efficiencies to drive margins materially higher. The H1 outcome was as expected. Working capital growth was surprising, but management expects it to somewhat unwind in H2 March 2024. We upgrade our margin assumptions, driving adjusted EPS up 5-6% in outer years, with new FY27E forecasts. We increase our 12-month price target to 2,500p and reiterate our ‘Outperform’ rating.