Broker tips: Wood Group, UK Mail Group

6th Oct 2015 17:45

(ShareCast News) - Barclays upgraded Wood Group to 'overweight' from 'equalweight', keeping its price target at 830p."We feel that Wood Group offers investors a combination of both stability and oil price exposure," the broker said, adding "If we do see an uptick in oil prices, then we feel that Wood Group is uniquely poised."Barclays said the company's engineering business should benefit from a restart of Brownfield work and the re-emergence over time of Greenfield projects.The bank said any increase in oil prices could be capped by an uptick in US activity, which should also benefit Wood Group. Volume growth in letters and parcels at UK Mail Group has accelerated since August, the company revealed in its pre-close trading update.Aggregate revenue expanded by a greater than expected 4% in the first half of the current fiscal year, in comparison to an increase of 0.8% in fiscal year 2015.Both mail and parcel volumes grew by 8% in the first half of the year. The former benefitted from a number of major contract wins whereas the latter continues to be driven by B2C volumes which are expanding due to online shopping, broker Investec pointed out."We are pleased to see this acceleration and the strong pipeline of new mail opportunities. We also note comments that progress to date has been encouraging on executing the plan put in place to address the recent challenges in the parcels business," analyst Alex Paterson said."We believe UK Mail is on the path to recovery," Paterson added.The analyst upgraded his recommendation on the stock to 'buy' from 'add' while keeping his target price on the shares unchanged at 365p.