Halma’s Quarterly Trading Update Is Tracking Slightly Above Expectations; Shares Marginally Undervalued

Narrow-moat Halma expects its full-year profit before tax to fall between GBP 353.1 million and GBP 369.6 million, which is slightly above our GBP 352 million estimate, but is not material enough to have an impact on our GBX 2,310 fair value estimate, which we reiterate. Additional quantitative details were light in the group's third-quarter trading update. However, the group has indicated that revenue growth is strong and order intake is ahead of the prior year, evidence of the resilient nature of customer demand for Halma’s products. The U.S. and Europe were highlighted as the largest contributors to revenue growth, offsetting declines in China. Shares appear marginally undervalued.