Rotork slumps again as JPMorgan downgrades to 'neutral'

21st Sep 2015 09:34

(ShareCast News) - Shares in industrial components manufacturer Rotork were under the cosh again as JPMorgan Cazenove downgraded the stock to 'neutral' from 'overweight' and slashed its price target to 180p from 245p following the company's profit warning last week.JPM said it's clear that end-market challenges are having a greater impact on the group than it expected and it has cut its 2015/2016/2017 earnings before interest, tax and amortisation forecasts by 16%/27%/25% as a result.It said that for now, the key word is uncertainty; uncertainty on the timing of current orders and deliveries, uncertainty on project cancellations and uncertainty on the outlook.JPM said Oil & Gas appears the primary problem area but with the weakness broad-based there seems little support from the group's other markets."We have previously been positive on the stock and our view on the quality of the business is unchanged but against this backdrop and with sentiment on the stock taking a significant hit following the profit warning (the rarest of events for Rotork) we see the near-term upside for the shares as limited."The stock was downgraded on Friday by Nomura and RBC Capital Markets.At 0940 BST, Rotork shares were down 6.9% at 175.50p.