DroneShield shares lower on Bell Potter downgrade
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The news: DroneShield shares fell in morning trade on the ASX after Bell Potter downgraded its recommendation on the defence tech company.
The numbers: DroneShield was down 1.7% to $1.28 per share by 11:40am AEDT. Bell Potter retained its $1.35 price target but downgraded its recommendation from 'buy' to 'hold'.
The stockbroking firm also reduced its revenue estimate for the 2024 calendar year by 15% to $82.4 million. It noted that DroneShield has recorded $28.9 million of revenue in the first half of the year, representing around 25% of Bell Potter's full-year estimate of $97.4 million.
The context: Bell Potter analyst Daniel Laing said that despite the downgrade, Bell Potter remains optimistic that DroneShield will deliver a strong finish to the year. Laing said the company will benefit from the "significant level" of inventory on hand to facilitate rapid fulfilment, the historical seasonality of the business, and numerous near-term opportunities in its sales pipeline.
DroneShield shares climbed on Wednesday after the Sydney-based company confirmed it had a received a repeat order of $13.5 million from a US government customer for a number of its counterdrone systems. The order follows a separate $3.1 million US government contract announced last month.
The source: Bell Potter research
