Broker snap: Panmure downgrades Weir to hold

1st Mar 2012 12:23

Panmure Gordon has downgraded its rating for engineering firm Weir from buy to hold, saying that 'life is simpler elsewhere'."During its bear raid in January, we were relaxed that the aftermarket dynamics in the unconventional oil and gas market would save the day. Looking at its aftermarket input, however, suggests that this is a more difficult market to pin down, and it may take Weir more time and more investment to envelop it. The broker says that while the 2011 results beat expectations, the trends in margins, mix dynamics and the trajectory of its balance sheet were "less reassuring".The broker has cut its estimates by around 4% and has in turn reduced the target price from 2,550p to 2,350p.Sentiment has been dampened in recent weeks by the ongoing troubles surrounding its attempted takeover of Australian mining equipment firm Ludowici.However no real mention of the offer was made in Panmure Gordon's research note, except the following: "with acquisitions, Weir's plate is fairly full now and, with this risk in mind, we are calling a time-out."Panmure said that for a "cleaner play in the space", Fenner is a better choice.BC