Halma’s solid H1 drives share up

Investing.com — Shares of Halma (LON:) Plc jumped over 7% on Thursday following its solid half-year results, which underscored strong growth in its Safety and Environmental & Analysis divisions. 

“We continue to see an attractive compounding “acquire and grow” investment case in Halma and reiterate our Buy rating,” said analysts at UBS in a note.

For the first half of fiscal 2025, Halma reported an 11% organic growth rate and a 70-basis-point expansion in adjusted EBIT margins. 

Group revenues reached £1.07 billion, surpassing consensus estimates of £1.05 billion, while adjusted EBIT came in at £223 million, exceeding forecasts by approximately 2.2%. 

UBS analysts emphasized the strength of Halma’s operational framework, particularly in navigating diverse market conditions and maintaining robust demand across its key divisions.

The Safety sector led the charge, achieving 9.6% organic revenue growth driven by broad-based performance across regions, including strong sales in the U.S. and Asia-Pacific. 

Meanwhile, the E&A segment posted an impressive 27.2% organic growth, bolstered by substantial gains in Optical Analysis and improved trends in Spectroscopy. 

However, the Healthcare division lagged behind, registering a slight revenue decline due to weaker demand in ophthalmology therapeutics and delays in OEM product launches.

UBS adjusted its fiscal 2025 earnings estimates slightly, raising projected adjusted EBIT by 0.1% and adjusted profit before tax by 0.6%. 

These revisions reflect continued confidence in the company’s operational momentum and the potential for further upside, especially as the outlook for its Safety and E&A divisions remains robust. 

Despite challenges in its Healthcare segment, Halma’s consistent performance in its core divisions underscores the durability of its business model. 

UBS analysts noted that the company’s valuation, trading at around 22 times its forward EV/EBIT, remains attractive relative to its peers in the industrial and diversified sectors.