logo-loader

Aggreko weak as Barclays cuts rating to ‘equal-weight’ from ‘overweight’, thinks stock now looks fairly valued

Published: 11:27 15 Nov 2018 GMT

Aggreko power plant
They also cut their target price for Aggreko to 760p from 830p, with the shares currently trading at 779.60p each

Barclays put the boot into Aggreko PLC (LON:AGK) on Thursday, downgrading its rating to ‘equal-weight’ from ‘overweight’ as it thinks the stock now looks fairly valued.

The bank’s analysts also cut their target price for the FTSE 250-listed temporary power provider to 760p from 830p, with the shares trading at 779.60p in late morning trading.

READ: Aggreko reports trading in line with expectations as Winter Olympics and Ryder Cup lift revenues

In a note to clients, Barclays analysts said the investment case for Aggreko and achievement of management's targets depends on “a manageable decline in the Utility business with the Rental and Industrial segments able to compensate.”

They added: “Despite a relatively reassuring third-quarter trading update, we feel the ongoing weakness in the Utility business and more general concerns of slower global economic growth could make it harder to progress as expected in 2019 and 2020.”

The analysts continued: “As the valuation has recovered from what we considered excessively depressed levels earlier in the year we now believe it fairly reflects the opportunities and risks.”

They said they only made small changes to profit forecasts for Aggreko, but a tax-induced reduction to their earnings per share estimates and the recent de-rating of the peer group leads it to cut its target and therefore downgrade its rating.

Chesnara reports strong 2023 results with improved cash generation and...

Chesnara PLC (LSE:CSN) chief executive Steve Murray discusses the company's full-year results for 2023 with Proactive's Stephen Gunnion, describing them as strong and particularly highlighting £53 million in commercial cash generation and a dividend coverage of around 150%. The company has...

2 hours, 1 minute ago