Aveva's numbers in line but outlook tough, says RBC Capital Markets

19th May 2015 10:38

Aveva's full-year results are in line, said RBC Capital Markets, with sales of £208.7m versus the investment bank's estimate of £208.4m and adjusted pretax profit of £62.1m compared with RBC's £61.8m estimate.RBC noted that the major end market remains tough for Aveva with the timing of an oil and gas capex recovery still uncertain."We also estimate a 6-12 month lag between end market recovery and flow through to Aveva's sales, suggesting a return to above 10% growth may not come for another year or two (or longer)," said RBC.Therefore, the focus this year appears to remain on cost control, added RBC. It said that Aveva's current valuation likely contains a degree of bid expectation, given the fact that the major end market clearly remains in a cyclical downturn and expects a correction should a bid fail to emerge.RBC rates the stock at sector perform with a 1500p price target.