Aggreko a 'buy' ahead of high-profile year, says Prime Wealth

15th Apr 2014 10:56

Prime Wealth has labelled temporary power provider Aggreko as a 'buy' after its first-quarter trading update on Tuesday, in which it reported an encouraging start to the year.The broker said it sees Aggreko as an "early stage if slightly speculative recovery play ahead of what will be a high profile year for the group". Prime Wealth gave the stock a 1,650p target price, saying that the shares are poised to return to a major support level - the 200-day moving average at 1,600p - and above in the next two to four weeks.Aggreko said that underlying revenues in the first quarter ended March 31st were up 5%, with two of its three regions delivering strong growth. "Temporary power group Aggreko could be about to switch the power back on. We believe today's interim statement marks a turning point, with strong revenue growth in two of its three main regions, an increase in underlying revenue and a massive reduction in the debt pile since last year," said Prime Wealth's Senior Trader Dafydd Davies."The company is returning £200m to shareholders, and while there is caution looking forward, and a new Chief Executive Officer yet to be appointed, with the debt pile falling at the current rate (£43m paid down since Christmas), the incoming appointee looks to be joining just as the lights are coming back on."The stock was up 1.9% at 1,538.5p by 10:54.BC