Broker snap: Investec raises forecasts for Weir

5th Nov 2012 09:35

Investec has upgraded its forecasts for engineering group Weir after the firm's well-received third-quarter update on Monday.Weir said that it is on track to deliver full-year adjusted profit before tax (PBT) in the range of £440-450m. Group order input in the third quarter was down 8% (-15% on a like-for-like basis), but this was as expected, according to Investec.The broker said: "A solid update, slightly ahead of our expectations, with only modest evidence for a bear attack on Minerals growth rates which were always going to slow."Oil & Gas has upside in the medium term as the US gas price recovers to a level when US horizontal drilling will begin adding back gas rigs after the rapid switch to liquids/shale oil seen in H1 2012."Investec has raised its 2012 adjusted PBT forecast by around 2% from £437m to £445, implying an earnings per share of around 151p. As such, target 1,850p target price is put under review.The broker has maintained its 'buy' rating on the stock, saying that the shares trade at 12 times earnings.Weir's shares were up 4.17% at 1,824p in morning trade in London.BC