Broker snap: Weir has rebound potential, says Galvan

23rd Jul 2012 11:15

Galvan Research and Trading has labelled engineering group Weir as a 'buy', saying that there is 'rebound potential' in the shares."The underperformance from Weir Group's oil and gas division earlier in the year was taken literally by the markets as a signal to sell the stock, with the 25% profits gain for the previous year also ignored," said Galvan's head of research Andrew Gibson. "But the reiteration of full-year guidance and Jefferies's positive appraisal has caught the markets on the hop, and in the view of the Galvan Research team merits a 'buy' rating for Weir Group at current levels," he said.Jefferies reiterated its 'buy' rating on the statement last month, saying that consensus upgrades to profit forecasts are in order.Gibson said: "The late June bear trap recovery via a gap to the upside as yet unfilled underlines the rebound potential in Weir Group shares."He said that only sustained price action below the 2012 support level of 1,400p would likely impeded the prospect of a test of the 200-day moving average resistance towards 1,800p.By 11:14 on Monday, Weir (down 0.26%) was trading relatively well compared to the FTSE 100 (down 1.69%).BC