After a 25% outperformance in recent months oil services group Petrofac (LON:PFC) no longer warrants a ‘buy’ rating, according to Citi, which today downgrades to ‘neutral’.
Citi analyst Mukhtar Garadaghi says Petrofac’s rerating in the market is now complete, and the stock’s relative value is now in line with its peers and an earnings per share recovery is now priced in.
Garadaghi, in a note, highlighted that for at least six months the project award outlook in the Middle East would be ‘anaemic’ and also noted the possible cashflow risks associated with ‘lump sum execution’ in a downcycle.
Elsewhere, Bank of America Merrill Lynch downgraded oil explorer and producer Soco International (LON:SIA) to ‘neutral’ from ‘buy’.
Primark owned Associated British Food (LON:ABF) was downgraded by Barclays Capital to ‘equal weight’ from ‘overweight’.
Barclays Capital also cut its price target for Cobham (LON:COB) to 270p from 330p, at the same time JP Morgan Cazenove downgraded the British engineering group to ‘neutral’ from ‘overweight’.
Barclays (LON:BARC), the bank, meanwhile, saw its price target cut by Berenberg to 170p from 200p and its ‘hold’ rating was repeated.
Engineered ceramics firm Vesuvius (LON:VSVS) was downgraded by JP Morgan to ‘neutral’ from ‘overweight’.
And, JP Morgan was responsible for the only notable upgrade as it lifted Redefine International to ‘neutral’ from ‘underweight’.