Broker snap: Panmure trims forecasts for RPS Group

7th Nov 2012 10:35

Panmure Gordon has reduced its price target for RPS Group from 270p to 242p and retained its cautious stance on the stock following a mixed trading update from the natural resources, land and property consultancy.RPS said it is on track to hit full-year expectations with results for the first nine months of the year well ahead of the 2011.The broker said: "RPS has delivered a solid Q3 IMS, indicating that it continues to trade in line with expectations. However, we take a more cautious stance on 2013E and 2014E estimates, given the scope for project delays and margin pressure in Australia, which is slowing down."Panmure has downgraded its 2013 and 2014 forecasts by 5-6%, with analysts saying that the key area of pressure comes in Australia particularly on the margin front. The broker has also cut its growth forecasts in Energy, saying that oil prices have the potential to fall from here."While we believe the business is well positioned longer term, we do not see a re-rating from here until earnings momentum improves and the fundamentals in its key growth markets become clearer," Panmure said. A 'hold' rating on the shares has been maintained.BC