Broker Shore Capital has downgraded Spectris PLC (LON:SXS) after the instrumentation and controls specialist reported a strong set of annual results last month but warned of continued difficult conditions.
After global manufacturing PMI data in March has shown significant weakness as a result of the coronavirus pandemic, ShoreCap’s analysts said their new 2020 revenue forecasts are below consensus.
READ: Spectris splashes out with special dividend despite challenging markets
“We expect further weakness in March readings with cases of COVID-19 spreading and causing shut-downs in Europe.”
On the back of the forecasts, ShoreCap is maintaining its 2,500p fair value for the shares, which represents 11% downside to the last closing price.
On the plus side, the analysts said Spectris management had a “proven ability” to mitigate risks from adverse market conditions and deliver lean initiatives, while the 43.2p final dividend and 150p per share special dividend will be paid to shareholders on the register at the close of business on 22 May.
But in light of the recent share price strength, the recommendation was downgraded to ‘sell’ from ‘hold’.