Broker tips: Petrofac, AMEC, Ashtead

15th Oct 2013 12:41

Citigroup has labelled Petrofac as one of its most preferred stocks among oil services names in the UK ahead of the sector's third-quarter reporting season.Citi said that Petrofac is exposed to defensive energy investments, such as the Middle East, the Commonwealth of Independent States and Integrated Energy Services. The company's backlog is up over 50% year-on-year and the bank sees scope for this to further increase over the next six months. AMEC however is the least preferred oil services name, given that it trades at a 10% premium to Petrofac (on 2015 estimates).Equipment rental firm Ashtead was making gains after JPMorgan Cazenove upgraded its rating for the stock from 'neutral' to 'overweight', saying that recent falls in the share price have been overdone.JPMorgan said Ashtead's US business, Sunbelt, has continually "outpaced" the market over the past two years, delivering significant growth without any material pick-up in end markets. "We believe that, as market conditions recover, the trend of larger players taking market share should continue allowing Sunbelt to continue this outperformance," it said.BC