Ann: Trading Halt, page-113

Will Bell Potter go against their own advice?

Shares downgradedWhile the above isn't enough for Bell Potter to continue recommending DroneShield shares as a buy, it does believe they have bottomed now.According to the note, the broker has downgraded its shares to a hold rating (from buy) with an improved price target of $1.60 (from $1.00). This is broadly in line with where DroneShield shares ended yesterday's session.Bell Potter summarises its downgrade as follows:Our long-term view of DroneShield remains unchanged, we view the company as a market leader in the still immature counter-drone market and one who will continue to benefit from substantial tailwinds in the defence sector. The company continues to be an attractive vehicle for exposure to popular investment themes, including geopolitical tensions, increasing use of drones and the rise of AI. However, at its current valuation DRO will attract increased scrutiny over its short-term performance and future contract announcements, thus we anticipate continued share price volatility. On this basis, we have downgraded our recommendation to HOLD as we await further evidence of pipeline conversion in the 2H or a more attractive entry point.