Broker snap: Fenner to win out in the long term

13th Jun 2012 14:42

finnCap has revisited its earnings forecasts for conveyor belt maker Fenner as the broker is now taking a more downbeat view on the impact of US coal activity on conveyor demand.The broker has not altered its view of the engineering group's Advanced Engineering Products division, just the Advanced Conveyor Systems unit.The new forecasts factor in 5% growth for the group in 2013, down from its previous assumption of 10.5% growth, which feeds through to single digit percentage year-on-year growth in earnings per share (EPS).As a result, the group has chopped its target price from 585p to 450p, while retaining its "buy" recommendation, as the shares have already taken a battering over the last month."The shares have fallen in a weak market, but have also underperformed versus many of the company's peers," notes finnCap analyst David Buxton."We continue to see Fenner as a longer-term winner in the sector, with the benefits of investment and acquisition feeding through to market share gains and strong cash generation," Buxton added. JH