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Broker Tips: Rotork, Spirax-Sarco Engineering, LondonMetric

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  • UBS upgrades Rotork to ‘buy’
  • UBS raises Spirax-Sarco Engineering to ‘buy’
  • Berenberg upgrades LondonMetric Property to ‘hold’
  • UBS downgrades Smith & Nephew to ‘sell’
  • Redburn downgrades Abrdn to ‘sell’

UBS has upgraded Rotork [LON:ROR] to ‘buy’ (neutral), and hiked its target price by more than a third to 370p (270p). Broker consensus indicates upside potential for the stock, after Rotork, a provider of flow control equipment, last week announced revenues were up 18.6% year-on-year, thanks to higher selling prices and supply chain adjustments. As well as having a strong balance sheet, the company is also expecting to go into next year with a record order book. RBC raised its Rotork target price to 340p (320p), with an ‘outperform’ rating, and Barclays raised its Rotork target price to 350p (310p), with an ‘overweight’. At close of trading yesterday, the stock was priced at 292.4p, a return of -18.1% YTD and -15.4% over 12 months.

UBS has raised Spirax-Sarco Engineering [LON:SPX] to ‘buy’ (neutral), raising the target price by almost a quarter to 13,700p (11,110p). The company has had a strong year so far, sealing two acquisitions and reporting a ‘strong’ first half of the year despite market headwinds, with a jump in profits and an order book at record levels. However, broker consensus on SPX, a thermal energy management and pumping systems company, is mixed: Shore Capital has the stock on ‘hold’, Barclays has an ‘equal-weight’ rating (12,250p) and RBC an ‘underperform’ (10,500p). At close of trading yesterday, the stock was priced at 11,210p, a return of -30.2% YTD and -29.2% over 12 months.


Berenberg has upgraded LondonMetric Property [LON:LMP] to ‘hold’ (sell), but trimmed expectations over the target price to 185p (200p). Earlier this month, JP Morgan Cazenove made a positive case for the stock, saying that even with a potential “90s-style correction in values” after a difficult third quarter caused in particular by an increase in interest rates, the stock offered 20% upside potential because it was trading below net asset value. Barclays has an ‘overweight’ rating, with a target price of 225p, Morgan Stanley has downgraded the stock to ‘equal-weight’ and Shore Capital rates the stock as a ‘buy’. At close of trading yesterday, the stock was priced at 181.3p, a return of -36.0% YTD and -33.1% over 12 months.

UBS has downgraded medical equipment company Smith & Nephew [LON:SN.] to ‘sell’ (neutral) and trimmed the target price to 970p (1,116p) pence. Last week, Berenberg reiterated its ‘buy’ rating for the stock and set a target price of 1,400p. RBC Capital and Barclays are also positive on the stock, both with a target price of 1,500p. Earlier this month, SN reported 3Q revenues a fraction lower than expected, with underlying revenue growth across all franchises and geographies, and an efficiency plan that was starting to take effect. At close of trading yesterday, the stock was priced at 1,078p, a return of -16.7% YTD and -13.1% over 12 months.

Redburn has downgraded Abrdn [LON:ABDN] to ‘sell’ (neutral), after a difficult third quarter for the sector that saw record levels of outflows from all open-ended equity funds in August and September, with a net flight from equity funds of £6.6bn since January, according to Calastone. Yet, Hargreaves Lansdown says a sharp rally in Abrdn’s share price (some 49% since the beginning of October), helped by a planned return of capital to investors, has placed Abrdn as a contender for promotion to the FTSE 100 index, which is to be decided today. Deutsche Bank this week reiterated its ‘sell’ rating on the stock but raised its target price to 170p (130p). RBC Capital has an ‘underperform’ rating (150p) and Citigroup has a ‘sell’. At close of trading yesterday, the stock was priced at 205.2p, a return of -14.8% YTD and -13.0% over 12 months.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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