Deutsche Bank downgraded Weir Group to ‘hold’ after disappointing orders and no dividend announced at its recent results.
After selling its oil and gas business Weir has gained support as a mining equipment stock. Weir shares have gained 30% since the start of October on hopes for the mining sector as economies revive.
The company is well placed to benefit from trends in the mining industry such as required investment in equipment, declining ore grades and a healthy backdrop for commodities, Deutsche said.
“That said, while the group reported a solid set of H2 2020 results, we were disappointed with the order figures and the decision to not pay a dividend,” Deutsche said. “We do not see valuation as compelling.”
The bank cut its rating from ‘buy’, reduced its price target to £20 from £21. It also cut earnings forecasts by 6% for 2021 and 3% for 2022.
Weir shares fell 3.4% to £18.57.5p at 13:43 GMT.
