Macquarie upgrades Codan to 'outperform' on bright outlook
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The news: Macquarie has upgraded technology manufacturer Codan, reiterating its positive outlook on the business and saying that recent share price pullback "provides a more attractive entry point" for investors.
The numbers: Macquarie upgraded Codan from 'neutral' to 'outperform' and trimmed its target price 0.8% to $17. Codan shares climbed 6.6% to end at $15.28 on Wednesday, closing as the day's top performing ASX 200 stock.
The context: Macquarie analysts said that Codan, which designs and manufactures communications equipment, is due for "strong growth" over FY25 and FY27, supported by a pipeline of new products set for release next fiscal year.
They noted that market concerns over Ukraine-linked revenue "appear overdone", saying "it is clear that global demand for advanced drone technology will increase at a rapid pace post the Ukraine conflict, with [Codan] well positioned to benefit".
The analysts said the recent decline in Codan's share price — dropping around 10% over the past month — offers potential investors a "more attractive entry point" to the stock.
The source: Macquarie research
