More upfront payments and ‘robust’ margin expectations support the upgrade, but, it was not the most resounding vote of confidence.
Analyst Mark Wilson noted that the Serious Fraud Office investigation is still an ‘investment barrier’. He also highlighted other concerns. Indeed, it is the currently depressed share price that provides the basis for Jefferies' seemingly bullish call.
“We cannot offer fundamental growth forecasts, but believe risk-aware upside is on offer at this level,” Wilson said.
The analyst added: “Overall, then, we project declining Group revenue, EBITDA & net income out to 2020. A tough investment case for new money and one that illustrates sector-wide challenges remain for the Oilfield Service sector.
“However, trading towards the average 5yr -1std deviation level, we see PFC as able to recover on fundamental operational progress of new awards and good execution.”
Jefferies' ‘buy’ recommendation comes with a 600p price target, which is some 32% above the current price of 454.6p.