Broker snap: Panmure Gordon retains hold on Aggreko

Date: Friday 15 Jun 2012

“We expect Aggreko to deliver further, high margin predictable growth over the medium term – and that isn’t a phrase we can use writing about too many other companies out there,” write analyst at Panmure Gordon this morning about temporary power provider Aggreko.

Backing up those expectations, they say, is the good order intake in international power projects (IPP), which has led the company to ramp up capital expenditure plans for the year – a great indicator for confidence and potential for 2013.

The company’s expectations for the year, nonetheless, are unchanged, with a tougher trading environment seen in the second half. For that reason, Panmure explains, it leaves its recommendation as Hold.

As well, an increase in bad debt provisions will be the focus of attention, given the circumstances, although the broker believes that they should be little surprise given economic news. Furthermore, they are only marginally higher than last year. Having said that, its analysts’ assumptions underlying its earnings per share forecasts are “cautious.”

Thus, they leave their forecasts unchanged for now, with a target price of 2227p and see 3.1% upside from current levels.

AB

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