Broker snap: Petrofac contracts cheer UBS

3rd Aug 2009 12:41

UBS likes the look of Petrofac's strong pipeline of contract bids and upgrades its rating on the oil services group to 'buy' from 'neutral'.Recent Petrofac contracts include a 48-month gas development contract in Abu Dhabi and a gas compression project in Oman worth in excess of $350m.UBS has lifted its earnings forecasts on Petrofac and ups its target price on the group to 1,000p from 610p.'We believe the company is likely to be able to maintain its industry-leading margin level on these contracts, and our review of upcoming tenders suggests there remains substantial room for growth,' UBS says.The broker's cheery note helped send shares in Petrofac up 10%.