TT Electronics Share Target Cut Following Delayed Results

Shares of TT Electronics (LON: TTG) continued to decline Wednesday after the company's announcement of a two-week delay in its FY24 results, which were initially scheduled for release in early March.

Following the news, Jefferies lowered its price target for the company’s shares to 88p from 97p, maintaining a Hold rating on the stock. 

The delay stems from the additional time required to complete the audit, with Jefferies highlighting concerns about the status of North American operational challenges and associated risks. 

The firm noted that FY25 guidance, which it provided in Tuesday’s release, reflects a 13% downgrade to consensus EBITA at the midpoint, further weighing on sentiment.

In its announcement, TT Electronics confirmed that adjusted operating profit for FY24 is expected to be in line with prior guidance, while free cash flow generation remains strong, keeping year-end leverage within the target range of 1-2x. 

However, a non-cash impairment charge of up to £35 million related to North American operations and a prior-year adjustment of up to £6 million for the Cleveland site are expected.

The company also delayed its 12% adjusted operating margin target beyond 2026, citing longer-than-expected turnaround efforts at its Cleveland site.

Shares of TT Electronics fell 2.6% on Tuesday and were down a further 1.5% on Wednesday as investors reacted to the uncertainty.