Broker tips: Weir, Senior, Morgan Crucible

23rd Jul 2012 11:33

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.Investec has reiterated its 'buy' recommendation and 250p target price for aerospace engineer Senior on the back of a strong first half and inexpensive valuation."Senior's interims are excellent and whilst the outlook statement is cautious, the long-term fundamentals of the group have never been stronger," the broker said.The shares are trading at 10.2 times next year's earnings, which Investec labels as "inexpensive for a group offering strong growth prospects in a low growth environment".Jefferies has downgraded its rating for materials group Morgan Crucible from 'buy' to 'hold' and slashed its target price for the stock from 365p to 300p ahead of the firm's first-half results tomorrow."After deliberating very hard, we take a more conservative stance on Morgan going into Tuesday's 1H12 results and lower our recommendation to 'hold'," the broker said in a research note on Monday morning."Morgan's valuation is not expensive, in our view, and there are reasons to be positive over the longer-term, but we expect a muted 1H12 update and risk of consensus downgrades.BC