Broker snap: Panmure downgrades Weir on 'limited upside'

22nd Oct 2012 10:32

Panmure Gordon has cut its recommendation for engineering group Weir from 'buy' to 'hold' ahead of the group's trading update in two weeks' time.Analyst Oliver Wynne-James said that the broker has downgraded the stock based on the "limited upside to our 12-month target price of 1,850p".Weir is an engineering solutions provider, designing, manufacturing and supplying products to the mining, oil and gas, and power and industrial markets.Wynne-James said that the current environment remains "challenging" for the firm: "the unconventional O&G storm still lingers (mix, pricing, reduced expenditures - see Q3 reports from customers such as Baker Hughes) and as the ever-deteriorating mining sector opex/capex storm begins."To an extent the company can rely on cost- cutting and on its more defensive aftermarket profile, but the risk-reward profile over the short term looks less appetising," he said.By 11:41 on Monday, shares were just 0.11% higher at 1,799p.BC