Aggreko loses power on UBS downgrade

(ShareCast News) - Temporary power provider Aggreko was under the cosh after UBS downgraded the stock to 'sell' from 'neutral' and slashed the price target to 800p from 1,050p."Weak markets have undoubtedly been a headwind for Aggreko for the past 3 years, but we now believe that Aggreko's problems are structural too," the bank said.As the power rental market has matured, Aggreko's competitive advantage has been eroded, UBS said.As a result, it expects pricing to come under increasing pressure, eating through cost savings and further compressing return on invested capital."A new product line is likely necessary to reinvent Aggreko, but we wouldn't expect to see a material benefit until 2020+m," it said, adding that it expects to see continued earnings risk and for the valuation to remain constrained.UBS said Aggreko urgently needs to launch a new product before it can hope to rebuild a unique competitive advantage and hit targets for return on capital employed.At 0920 BST, Aggreko shares were down 3.2% to 1,010p.