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Petrofac shares boosted by upgrade to ‘buy’ from ‘hold’ from Jefferies International

The US broker's analysts noted that Petrofac "is an increasingly well-run business providing realistic expectations trading opportunities within continued tough Oilfield Service markets"
Oilfield services
Jefferies trimmed its target price for Petrofac to 590p from 640p, albeit with the shares currently trading at 525.60p, up 3.1% on Friday’s close

Jefferies International gave a boost to Petrofac Limited (LON:PFC) shares on Monday, upgrading its rating for the FTSE 250-listed oil services group to ‘buy’ from ‘hold’.

However, the US broker trimmed its target price for Petrofac to 590p from 640p, albeit with the shares currently trading at 525.60p, up 3.1% on Friday’s close.

READ: Petrofac says trading in line with expectations, new order intake of US$5.0bn in year to date

In a note to clients, Jefferies’ analysts pointed out that Petrofac “continues to occupy a stay away category for many investors."

But, they added: “For us, it is an increasingly well-run business providing realistic expectations trading opportunities within continued tough Oilfield Service markets.”

The analysts continued: “With a net cash balance sheet now firmly in sight and realistic new awards required for 2019 we upgrade to Buy (again) at what we see as depressed multiples: 5.5x FY19 EV/EBITDA, 7x adj EPS and ahead of, we expect, good results on 28 Feb.”

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