Oxford Nanopore jumps as US bank hikes forecasts and price target

Oxford Nanopore Technologies (ONT) shares surged after Citi reiterated its 'buy' rating and significantly raised its price target to 240p from 180p, following the company's strong interim results. Citi upgraded its 2025 constant currency growth forecast by approximately 250 basis points to 22.5% and increased its 2025 revenue estimate to £219 million, attributing the improved outlook to better-than-expected top-line performance, ongoing manufacturing automation, and pricing benefits. The bank emphasized that the long-term growth trajectory remains intact, particularly given ONT's focus on applied, biopharma, and clinical markets.

Analysis

Oxford Nanopore Technologies (LSE:ONT) experienced a significant share price increase following a positive revision from Citi, which reiterated its 'buy' rating and raised its price target to 240p from 180p. The basis for this upgrade is the company's strong interim results and improved guidance. Citi has increased its 2025 constant currency growth forecast for ONT by 250 basis points to 22.5%, placing it above the current consensus of 21.6%, and now projects 2025 revenues of £219 million. A key driver for this optimism is the improvement in profitability, with gross profit estimates lifted by 2-4% through the forecast period. This is attributed to tangible operational gains, including manufacturing automation and pricing power from a new capex model. The first-half gross margin, exceeding 60% when excluding one-off inventory effects, provides strong evidence of this enhanced efficiency. Citi's analysis maintains that the company's long-term growth outlook is intact, supported by a strategic focus on the applied, biopharma, and clinical markets.

Key Decisions for Investors

• The substantial price target increase to 240p and upgraded 2025 growth forecast from a major bank provide a strong quantitative signal that may support initiating or adding to a long position.
• Investors should monitor the company's ability to sustain gross margins above the 60% threshold, as this is a key indicator of its operational efficiency and pricing power, which underpins the revised profit forecasts.
• While the near-term outlook is positive, note that Citi's growth estimates for 2026 are unchanged, suggesting that continued market penetration in the targeted biopharma and clinical segments is critical for justifying a long-term holding.