Bodycote shares fall as JPMorgan downgrades to 'neutral'

FTSE 250 constituent Bodycote was down more than 2% on Wednesday after US investment bank JPMorgan Chase lowered its recommendation to 'neutral' from 'overweight'.

The heating equipment supplier's 12-month target price was also raised from 680p to 770p.

JPM believes Bodycote has gained sufficient ground since it was upgraded in December following the release its final quarter earnings report, which was in line with forecasts.

"The shares are up 31% since early December, we had upgraded the stock based on the market's lowered expectations, reflected in conservative estimates and attractive valuation," the note from JPMorgan said.

"We see this situation having reversed somewhat as we now build significant improvement in our estimates, reducing the upside potential."

Weakness in the oil and gas market and a knock-off in demand combined to send the company's sales down in its earnings report, released on Tuesday. Like-for-like sales to the energy markets were down 27%, Bodycote reported.

Its full year pre- tax profits were higher than in 2015 however, rising from £75m to £91.9m.

Bodycote's share price fell 2.28% as of 1122 GMT, before regaining ground to be seen flat at 1512 GMT.