Broker tips: AB Dynamics, Zoo Digital, Funding Circle

10th Nov 2026 14:57

(Sharecast News) - Analysts at Berenberg reduced their target price on AB Dynamics to 1,350p from 1,700p on Tuesday following the group's full-year results, citing a tougher outlook for growth and margins amid continued disruption across the global automotive sector.

Berenberg, which maintained its 'buy' rating on the stock, said AB Dynamics had delivered a resilient performance in difficult market conditions, with revenues falling 12% year-on-year to £91.6m and adjusted operating profits down 18% to £18.3m. However, despite the decline in earnings, AB maintained its adjusted operating margin at 20%, supported by operational improvements and early cost-saving measures.

The German bank highlighted that the year-end order book remained broadly stable at £31m, compared with £32m a year earlier, providing good visibility into the new financial year despite ongoing macroeconomic headwinds affecting automotive customers.

Berenberg noted that management plans to reinvest in commercial operations to support future growth, while maintaining a strong balance sheet and pursuing acquisition opportunities, with net cash standing at £24.5m at year-end, following the firm's acquisition of eMpulse in August.

Looking ahead, AB Dynamics expects FY27 adjusted operating profits to be broadly in line with market expectations of around £19.7m. However, Berenberg trimmed its forecasts and lowered its valuation to reflect a more cautious view on long-term growth and profitability.

Berenberg added that the stock remains attractively valued given AB's cash position, despite persistent concerns over near-term conditions in the automotive industry.

Canaccord Genuity raised its target price on Zoo Digital to 31p from 22p on Tuesday and reiterated its 'buy' recommendation on the stock after first-half results pointed to an accelerating recovery in trading and profitability.

The Canadian bank said the media localisation specialist had emerged from a difficult period with a leaner cost base, broader customer relationships and a stronger competitive position, supported by AI-enabled workflows and faster project turnaround times.

Zoo reported H1 revenues of $23.6m, up 6% year-on-year, while adjusted underlying earnings jumped 79% to $3.6m. The group also returned to operating profitability, posting operating profits of $1.5m, compared with a loss of $1.2m a year earlier.

Canaccord highlighted particularly strong momentum outside Zoo's largest customer, whose contribution halved to $6.1m. Excluding that customer, revenues across the remainder of the business increased 72%, reflecting growing demand from major global streaming platforms.

The analysts also pointed to a strong recovery in localisation revenues, which rose 46% to $16.7m and more than offset weaker media services revenues.

Looking ahead, Canaccord said current trading remained encouraging, tender activity was at its highest level since before the Hollywood strikes and the pipeline of original content was beginning to recover. It also noted that Zoo's ability to deliver large, multi-language projects at speed was becoming an increasingly important differentiator.

As a result, the broker believes consensus forecasts could prove conservative and sees increasing upside risk to earnings expectations.

Shore Capital maintained a 'buy' rating on Funding Circle on Tuesday after a "positive update" from the fintech group in which upgraded its full-year outlook.

Funding Circle said it now expects FY26 revenues of at least £275m, with profit margins of around 16%, ahead of previous guidance for revenues of more than £255m and pre-tax profits of more than £40m.

The FTSE 250-listed firm said positive trends highlighted at its half-year results had continued through September and October, with November also starting strongly.

Shore Capital said previous guidance from the company was "conservative" and it was already more optimistic than consensus forecasts, thus limiting the extent of upgrades to its own numbers. Nevertheless, the target price for the shares has been lifted to 255p from 245p.

"The update provides further evidence of strong operational execution against an uncertain macro backdrop, while the recent confirmation of Rob Straathof as Lisa Jacobs' successor as CEO has also removed another source of uncertainty. Consequently, we retain our 'buy' recommendation."