(Sharecast News) – Analysts at Berenberg lowered their target price on engineering and consulting business John Wood Group from 200.0p to 180.0p on Tuesday, noting it still sees opportunities elsewhere in the sector.
Berenberg said Wood Group issued a “solid” third-quarter trading statement, highlighting another quarter of revenue and underlying earnings growth. Full-year guidance was reiterated as growth was delivered across the business, while medium-term targets remained in place.
“2023 and, to an extent, 2024 are expected to be transitional years for Wood as it reduces cash exceptional items and focuses on FCF generation and EBITDA growth,” stated Berenberg.
However, in the near term, Berenberg forecasts “limited top-line growth” across the business and “a lack of catalysts” that could implement a re-rating in the shares. The German bank also pointed out that this was against a backdrop of slightly weaker oil and gas prices, with energy remaining the largest end-market for Wood.
“As such, despite steady delivery across 2023, we think there are opportunities elsewhere in the sector and retain our ‘hold’ rating,” said Berenberg.
Reporting by Iain Gilbert at Sharecast.com
