In a note published today, Peel Hunt analyst Oliver Tipping raises his target price to 6p.

He explains his rationale for doing so as follows: “We re-assess our automotive assumptions from FY27E after 3Q volumes. Our base case is 9m units, bull 10m, and blue-sky 12m.

“This expansion should deliver significant cash generation of >$20m in FY27E, increasing further in future years.

“We de-risk our aftermarket sales forecasts, given their volatility, reducing our FY27E assumption from 18k to 10k units.”

He concludes: “We believe Seeing Machines holds >50% market share in European automotive DMS and hence increase FY27E EBITDA by 52% to $21m as the EU General Safety Regulation (GSR) is enshrined in law. We use DCF analysis to increase our TP from 4p to 6p, and maintain our Buy rating.”

The writer holds stock in Seeing Machines.