DAVY VIEW

Advanced Energy’s decision not to make a formal bid for XP Power (XPP) is initially disappointing, but it was always very opportunistic against a depressed XPP share price. We continue to believe that significant shareholder value can be created from a standalone XPP. Historic operational leverage into recovering volumes is high, and we continue to expect a recovery in all end markets in 2025. We see limited scope for a new bid from another listed peer. We reiterate our price target of 2530p and ‘Outperform’ rating.