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Investec says Weir Group is no longer a ‘sell’

Published: 11:26 15 Mar 2018 GMT

oil and gas operations
Investec has a 1985p price target

It’s time to stop selling Weir Group Plc (LON:WEIR) shares, that’s according to Investec analyst Thomas Rands, who has upgraded the engineer to ‘hold’.

“Nearly four years to the day since we became sellers, we turn more positive, moving to Hold on upgraded earnings,” Rands said in a note.

READ: Pumps specialist Weir Group tempers growth forecasts

The analyst highlighted that Weir shareholders have endured a “rollercoaster ride”, due at least in part to the volatility of oil prices.

Following years of underperformance, Rands reckons the tide may be turning (on valuation grounds at least).

“Over the last five years and one-year, Weir has underperformed the FTSE250 by 62% and 5% respectively,” he added.

“We believe the valuation now more fairly reflects the earnings growth profile when adjusted for balance sheet leverage.”

The hold recommendation comes with an improved (up 20%) price target which now stands at 1985p, compared to the current price of 1962p.

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