Broker snap: Aveva upgraded to 'fair value'

27th May 2011 12:44

Singer Capital Markets has upgraded its rating on engineering software firm Aveva Group after a strong end to the year and a confident outlook for the current year.The group's full-year results were ahead in terms of revenue performance but were in line on an adjusted pre-tax profit and earnings per share basis, Singer said."The company also saw an improvement in the last quarter of the year and expects to deliver strong organic revenue growth this year," the broker said."The shares are currently trading on a calender year 2012 price-to-earnings multiple of 23, or 19 if we strip out the cash. This is already at a signficant premium to the sector, making it difficult to recommend investors to buy the shares at the current level."As a result, the broker moves its rating to 'fair value', from 'sell', and raises the target price to 1,500p, from 1,250p.---BC