Rotork slumps again as Nomura, RBC downgrade after profit warning

18th Sep 2015 11:27

(ShareCast News) - Rotork was in the red again on Friday, having fallen sharply the day before on the back of a profit warning, as analysts at Nomura and RBC Capital Markets downgraded their ratings on the stock.Nomura cut Rotork to 'reduce' from 'neutral' and slashed the price target to 180p from 215p, saying the profit warning has resulted in a 5% cut to the bank's full year 2015 revenue estimates and an 11% cut to its forecasts for earnings before interest, tax and amortisation, and earnings per share.It said management commentary around delays to deliveries, slower decision-making and lack of conversion from quoting activity to orders makes it nervous for the development of revenue in 2016/17."The business model remains strong and returns remain above-sector average, but the revenue profile over the coming couple of years looks bleak indeed."Meanwhile, RBC cut its stance on the stock to 'underperform' from 'sector perform' and dropped the target price to 160p from 210p, saying the post-warning multiple doesn't reflect risks."The 11% share price fall following yesterday's profit warning does not sufficiently reflect our 15/20% cut to 2015/2016 forecasts," the Canadian bank said.It said that with end markets volatile enough for management to revise down its second-half estimates by 20% six weeks after seeming to reassure, it does not see the implied re-rating as justified.At 1136 BST, Rotork shares were down 3.1% at 186.60p.