20th November 2013
Brokers have reaffirmed their assertion that Amec is a ‘buy’ following the project management group’s market update this week writes Philip Scott.
Amec, which serves a range of industries, including the transport, oil and gas sectors in its latest interim management statement confirmed that trading continues to be in line with expectations, where the order intake and forward visibility remains good.
On the back of the report brokers at Deutsche confirmed that they are maintaining their ‘buy’ recommendation and have a target price of 1,250p for the FTSE 100 listed group’s shares which are currently trading at the 1,177p mark.
Over the past month the Amec’s shares have rallied by 7% while the past 12 months has seen them climb by 15%.
There has been a strong performance in the UK North Sea and US Renewable markets and the order book now stands at £4bn after winning a number of contracts in the latest reporting period.
Helal Miah, investment research analyst at The Share Centre is also tipping the share as one to purchase.
He says: “There has been a strong performance in the UK North Sea and US Renewable markets and the order book now stands at £4bn after winning a number of contracts in the latest reporting period.
“Amec continues to invest in its end markets and demand for its services particularly from the conventional oil and gas sector offsetting weakness from oil sands and mining markets. Work with EDF on nuclear power continues, including the building of new nuclear power stations.”
The full year underlying revenue is expected to be in-line with last year and 2014 earnings are expected to be above 100p notes Miah.
He adds: “Investors will be pleased to hear that the company may return some capital to shareholders by year-end.
“Sentiment across the sector has been depressed on a weaker outlook for 2013 but Amec’s more diversified portfolio of businesses and good results has seen the share price hold up better than its peer group. We continue to recommend medium risk investors ‘buy’ Amec.”