Shares in Intertek Group PLC (LSE:ITRK), the London-listed inspection and certification firm, fell 2.5% after a downgrade by a leading investment bank.
RBC Capital moved from 'outperform' to 'sector perform' on the stock, setting a new price target of 5,000p, down from 5,200p.
The bank believes Intertek has reached a fair valuation after a strong performance in 2024, particularly when compared to its industry peers.
Its analysts noted that while Intertek has made strides in improving its operations, including better capital management and relatively low restructuring costs compared to competitors, concerns remain about the company’s future growth.
The downgrade also takes into account the impact of currency fluctuations and a more uncertain outlook for 2025.
One key issue for the company is its history of paying too much for acquisitions, a reputation that has been difficult to shake.
However, RBC still sees positives for long-term investors, particularly in Intertek’s strong regional presence and disciplined approach to spending in recent years.
Despite these strengths, RBC believes the company’s current share price now reflects its fair value, leading to the rating adjustment.
In early trading, the stock was off 131p at 4,984p.