Broker snap: Investec downgrades Aggreko to 'hold'

17th Dec 2012 12:07

Investec has cut its rating for temporary power and temperature control solutions group Aggreko after the company's gloomy pre-close trading update on Monday which sent shares tumbling."The group should deliver its forecast FY12E earnings outcome, but the outlook for FY13E is much more adverse than we expected," said analyst John Lawson."We had assumed that the group would repeat the warning given at the last IMS (such as the tough comparatives) but the group appears much more cautious on the economic outlook," he said. Investec has made no changes to its 2012 full-year forecasts - it expects a profit before tax (PBT) of £365m and earnings per share (EPS) of 101.9p - but has slashed its 2013 estimates by around 13% for 2013 and now expects the company to generate a PBT of £340m and EPS of 95p next year.Lawson said: "Today's news will be seen as a something of a setback and we expect the stock will come off today. That said, we continue to believe that there are many structural drivers that should continue to drive earnings in the years to come. For now, we move our recommendation from 'buy' to 'hold'."The broker's target price for Aggreko's shares has been placed under review.The stock was down a whopping 17.32% at 1,757p just after midday.BC