It could be time to get back in the oil services water, according to Jefferies, which has today upgraded engineering group
Petrofac (
LON:PFC) to ‘buy’ from ‘hold’.
Analyst Mark Wilson says
Petrofac still has the ‘opportunity of work’ at a time when rival contractors have to search for jobs.
He also points out that financial results, out earlier this week, emphasised
Petrofac’s return to its original and core business, onshore services in the Middle East.
A new price target of 855p suggests some 10% upside to Wednesday’s closing price (albeit the stock is already up 5.6% today at 821p).
Nevertheless, the upgrade does still fall short of a slam dunk.
“Growth from 2018 remains unlikely, but the path to that point is better than peers,” Wilson said in a note.
JP Morgan, meanwhile, cut its target for
Petrofac to 944p from 978p, and repeated an ‘overweight’ rating.
Another oil services group was on the end of multiple downgrades.
Barclays, JP Morgan and
Credit Suisse all wrote down their targets for engineer
Weir Group (
LON:WEIR) following yesterday’s report of a £200mln loss due in part to a slump in US fracking business and separately the Australian mining sector.
Berenberg took the axe to retailers. It downgraded Next (
LON:NXT) to ‘hold’ from ‘buy’ and lowered its target to 7,300p from 7,600p.
Debenhams (
LON:DEB) saw Berenberg reduce its target price by a quarter, to 75p from 100p, while the bank also cut its target for
SuperGroup (
LON:SGP) to 1,750p from 1,800p.
Other rating changes were sparse, with the majority of changes coming to target prices.
JP Morgan moved its cross-hair for
Interserve (
LON:IRV), rated ‘overweight’, to 543p from 637p.
Citigroup, meanwhile, cut ‘sell’ rated Babcock’s (
LON:BAB) target to 850p from 1,000