Broker snap: Jefferies lifts forecasts for Keller

15th May 2013 09:40

Conditions remain mixed for Keller but Jefferies reckons that the engineering company remains well-positioned for a recovery in the US residential markets.The broker has raised its target price for the FTSE 250 stock from 820p to 1,050p after upgrading its 2013 and 2014 profit forecasts by 17% and 11%, respectively. A 'buy' rating was maintained for the stock."The main driver of our upgrades is improving conditions in the North American residential markets, and in our view Keller remains an attractive way to play this recovery," said analyst Anthony Codling.At current prices, the stock is trading at 15 times full-year earnings estimates. Jefferies' new target price suggests upside of 21% to the share price earlier this week.Codling concluded: "In our view we are at the early stages of a recovery cycle in global construction markets, the recovery is not uniform by any means and many of Keller's markets remain fragile, representing risk, but in general, the light at the end of the tunnel is starting to burn a little brighter."The shares were up 9.57% at 950p by 09:37 on Wednesday.BC