Weir boosted by Barclays upgrade to 'overweight'

Barclays has upgraded its stance on Weir to 'overweight' from 'equalweight' and hiked the price target to 2,300p from 1,900p, saying an attractive entry point has emerged.

It noted Weir has been the sector's biggest underperfomer so far this year, down 7% since its full-year results in tandem with the wider oil services sector.

"Despite the oil price volatility, we think that has opened up a compelling entry point into what we see as the sector’s best earnings recovery story during 2016-19 with a three-year earnings per share compound annual growth rate of 32%, albeit from depressed 2016 levels."

Barclays said it sees the investment case gradually shifting to Minerals after a near-exclusive focus on Oil & Gas in the past two years, adding that it reckons the recovery potential here is under-appreciated in current consensus estimates and in company guidance.

"We see Minerals sustaining double-digit order growth over 2017-18," the bank said.

Last month, Weir reported a 22% drop in full-year pre-tax profit to £170m as it was hit by the collapse in prices but said it had returned to growth in the final quarter as prospects for the sector brightened.

At 1057 GMT, the shares were up 2.9% to 1,930p.