LONDON (SHARECAST) - Peel Hunt has said it has 'increasing confidence' in environment and property consultancy RPS and reiterated its conviction buy rating on the stock following the group's full-year results last week.
The outlook for 2012 looks reasonably good: in Energy (54% of 2011 profits), global E&P spend is expected to significantly exceed 2011 and there are indications of a pick-up in drilling activity in the Gulf of Mexico; in Built & Natural Environment Europe (28%), there is a mixed outlook due to client caution and regulation; while in Built & Natural Environment Australia (18%), the sector looks buoyant and is expected to benefit from no repeat of last year's severe weather in Queensland.
After upping its 2012 pre-tax profit and earnings per share (EPS) estimates slightly, Peel Hunt has raised its target price from 235p to 260p.
"With increased confidence in estimates, which forecast 15% EPS growth in 2012E, and robust finances creating the opportunity for further enhancing acquisitions, we see the potential for both earnings upgrades and a further re-rating of the equity," said analyst Christopher Bamberry.
Shares were trading 1.41% higher at 237.2p by mid-morning in London.