Credit Suisse has slashed its target price for engineering group Weir to just 1,700p, from 2,350p previously, following this week's first-quarter statement.
"Drivers of our downgrade are solely Upstream Oil & Gas derived and reflect more cautious management guidance and our view that a pricing headwind will materialise for both pressure pumping OE and aftermarket in 2013E," the broker said.
"This joint venture signals a strengthening of our relationship with Trasteel. We believe that this new, higher margin anthracite focus will assist greater value creation for shareholders, whilst being developed along side a thermal coal business. We are also very pleased to report rapid progress at the mine in support of this pivotal opportunity for Elitheni coal."
I hate them. I wish shares weren't 'fungible' and each individual holding had to be specifically leant out to a shorter. Who'd want to do it? You're letting someone try and bring down the company you're invested in and you want to go up.
Bananas - bring back paper cetificates if that's what it takes. All these electronic nominee shareholdings anonymously lend out the shares for their own profit - doesn't do the actual holders any good at all. So annoying.
Hope there's one massive 'bear trap' and all these hedge funds get done over. The AGM's on Tues 8th and a trading statement is due on Wed 9th - seems strange.
Latest figures show almost 20pc of shares in Weir, the FTSE 100 company, are being shorted – or sold down – ahead of a trading statement on Wednesday. The short position, of 18.6pc, is almost 20 times that of the average FTSE 100 company, of approximately 1pc, according to information from Data Explorers. It has risen from 6.6pc at the start of the year, as investors bet that the company's interest in the American fracking market will backfire. Fracking is a relatively new technique using hydraulic fracturing to access gap trapped in shale rock at low cost. Weir's SPM business is a market leader in providing pumps to the industry, but it accounts for just 9pc of group sales. Hedge funds have taken the positions with the view that the US gas price will fall, making fracking less economic. At the same time, Weir's own house broker, Bank of America Merrill Lynch, has downgraded its forecasts for 2013.
Last week, analyst Alex Toms said, due to more cautious comments regarding SPM than expected, it has cut its earnings per share estimate for next year to 9pc below consensus forecasts. A Weir spokesman declined to comment.
Weir Oil & Gas launches new products for upstream oil and gas markets The Oil & Gas division of the Weir Group PLC (Weir) today launches five new products, in line with its strategy of being an innovative supplier to the upstream oil and gas markets. The new products broaden its portfolio, expanding its addressable market by over US$500m. They include the Duralast(TM) patent-pending fluid end technology. The products will launch at the Offshore Technology Conference in Houston, Texas, the world's foremost event for drilling, exploration and production technology. Fluid ends are a key aftermarket pressure pumping component used in shale oil and gas drilling operations. When an SPM® frac pump uses Duralast(TM), we project that it can have up to double the life of existing SPM® fluid ends. Using existing materials, Duralast(TM) can deliver operational cost savings while the technology can also be applied to fluid ends made with stainless steel and other alloys. Duralast(TM) fluid end technology will be initially launched for our Destiny(TM) frac pump range in the third quarter of 2012, before being applied across the full SPM® fluid end range. The other new products launched today are: Destiny(TM) QWS 2800 frac pump - this pump has been engineered for harsh shale applications. The pump's increased horsepower and Duralast(TM) fluid end technology is designed to deliver robust performance and low operating costs. Gladiator(TM) water and slurry pumps - the slurry pump has been designed to deliver lower operating costs through long lasting performance, and is manufactured using a proprietary Weir alloy which has already been proven to significantly increase the equipment life in aggressive mining applications. Stampede(TM) swellable packers - use a Weir proprietary elastomer compound which provides predictable swell when in contact with well fluids and with changes in temperature. The Weir Group PLC will issue its Q1 interim management statement on 9 May 2012.
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