Despite VEEM's (ASX:VEE) downgraded fiscal first-half earnings guidance, analysts were constructive on the medium-to-long-term earnings potential of the firm, Euroz Hartleys said in a note on Friday.

It now expects revenue of between AU$24 million and AU$26 million during the period, and EBITDA of up to AU$1 million. Delays from defense sector orders are the primary driver of the earnings downgrade, with the recently concluded six-week US government shutdown a key contributor.

The investment firm retained its speculative buy recommendation and cut the price target to AU$1.30 per share from AU$1.85 per share.