Broker Daniel Stewart & Co has raised its target price for human tissue research group Asterand PLC (LSE: ATD) to 31 pence and reiterated its ‘buy’ stance on the stock.
In an entry for its weekly Equity Perspectives report, it called Asterand a lead player in a high-growth defensive market.
“Because demand for human tissues used in research is largely determined by structural developments in the pharmaceutical sector rather than by the economic business cycle, Asterand's prospects remain bright despite the current economic downturn,” the broker said.
Driven by demand from the pharmaceutical industry, the US$700m global market for human tissues and associated research services is estimated to be growing between 20% and 30% annually, it added.
Separately, Edison Investment Research issued a note saying its Discounted Cash Flow model gives Asterand a value of around £29 million, indicating upside to its current enterprise value of around 21 million, and further IP licensing and more contracts of the type signed with the US Armed Forces Institute of Pathology could justify a higher rating still.