Halma FY26 Results - First Take: Strong print but FY27 Photonics guide likely a disappointment

Research evidence excerpt

Halma FY26 Results - First Take: Strong print but FY27 Photonics guide likely a disappointment

Chitrita C Sinha AC Europe Equity Research

(44-20) 7742-7176 11 June 2026 C A Z E N O V E

chitrita.sinha@jpmorgan.com

Investment Thesis, Valuation and Risks

Halma (Neutral; Price Target: 4,150p)

Investment Thesis

• Halma is a high-quality stock: The group has a track record of robust earnings,

premium returns and dividend growth delivered through a mixture of organic and

acquisitive growth.

• Exposure to attractive end-markets. The group’s key exposures are to datacenters,

infrastructure, medical and safety markets.

• Reliance on the acquisition model. While the business model relies partly on the

ability to make acquisitions, it becomes harder as the group becomes bigger to make a

large enough acquisition to make a meaningful contribution to top-line growth.

However, to date, the group has executed well here.

• Our Neutral rating reflects a valuation that leaves the risk/reward balanced, in our view.

Valuation

• Our June 2027 Price Target is based on a reverse DCF valuation. The 12-month forward

target multiple is 21.5x EV/adj. EBITA, applied to our CY 2027 forecasts, and rolled six

months forward. The multiple takes into account the through-cycle growth, margin, cost

of capital and asset intensity.

Risks to Rating and Price Target

Risks to the upside:

• Macro conditions deteriorate, given its defensive characteristics Halma would likely

outperform.

• Acceleration in bolt-on acquisition run-rate. M&A upgrades would help support the

multiple.

• Stronger-than-expected growth in datacenters

• Decrease in bond yields supporting a re-rating of long duration equities.

Risks to the downside:

• Macro conditions improve, given its defensive characteristics Halma would likely