Jefferies has sharply revised its stance on Judges Scientific, downgrading the company from a "buy" to an "underperform" rating in its most recent UK Industrials and Capital Goods sector review. The broker simultaneously cut its price target to 4,015p from 7,380p.
Judges Scientific shares were last cited at 4,820p, which - on the basis of Jefferies' new target - implies a potential downside of about 17%. Jefferies noted that the company has a market capitalisation of roughly £0.3 billion.
The downgrade follows what Jefferies described as a reassessment of Judges' recent performance and outlook after two years of profit warnings that have weighed on investor sentiment. The broker said the firm had previously been regarded as a quality name within UK industrials, supported by strong sector metrics, but that this profile has deteriorated amid declining research spending and weaker visibility across its end markets.
Under Jefferies' revised framework, Judges Scientific is being valued at a 20% discount to the broker's defined "quality" UK Industrials peer group on an annualised FY26F EV/EBITA basis. The 4,015p target corresponds to a FY27F EV/EBITA multiple of approximately 11.8x, according to Jefferies.
Jefferies' estimates show Judges trading on 17.5x FY24A earnings, rising to 24.3x in FY25E before easing to 19.5x in FY26E. While the firm operates 23 businesses with leading market shares in niche segments and runs a decentralised operating model, Jefferies said those structural advantages have not been sufficient to offset the impact of softer end-market conditions.
In addition to weaker demand dynamics, the broker highlighted limited visibility and a tougher backdrop for acquisitions as factors underpinning its more cautious view, despite the company having balance sheet headroom.
The double-downgrade places Judges among Jefferies' least-preferred names within its UK Industrials coverage. The broker cited Halma as another name that remains rated "underperform."
Context and implications
Jefferies' move reduces the valuation expectations for Judges Scientific and signals increased caution about the company's near-term earnings trajectory. The change is framed around observable company-level factors cited by the broker: a sequence of profit warnings, lower research spending and reduced end-market clarity. Jefferies' valuation adjustments and peer-discount approach quantify that caution in multiples and an explicit price target.