HSBC has downgraded its stance on Wood Group from 'overweight' to 'neutral' and cut its target price from 900p to 860p, citing a 'more benign medium-term outlook' for the energy services firm.While the bank doesn't think the stock's valuation is demanding, it says that it sees a more balanced risk/reward: "We think the market will remain somewhat nervous around the outlook for Engineering and, on a 12-month view, we do not see enough upside to justify a positive view."The company disappointed the market earlier in the week after saying that while the full-year results will likely meet expectations, growth guidance for its Engineering division has been scaled back slightly. The company now forecasts just 10-15% growth in Engineering earnings before interest, tax and amortisation (EBITA), compared with previous guidance for a 15% increase.HSBC said that its group-level EBITA and earnings per share (EPS) forecasts remain unchanged for 2013 as lowered estimates for Engineering are made up for with the other divisions, namely PSN and GTS.The bank said: "In 2014, we have reduced confidence in the outlook, particularly around replacing two abnormally large contracts (Mafumeira Sul and Ichthys) that close out this year and projects delays in the Gulf of Mexico. We therefore downgrade both 2014e EBITA and EPS by 10% driven almost entirely by the Engineering division."Looking ahead to 2015, HSBC foresees a significant pipeline of projects in the Gulf of Mexico that could drive a return to growth, therefore has cut forecasts by a lesser 7%.The stock was down 1.54% at 798p by 10:10 on Thursday.BC