Aggreko powers ahead on Deutsche Bank upgrades

(ShareCast News) - Aggreko got a boost on Thursday as Deutsche Bank upped its stance on the temporary power provider to 'buy' from 'hold' and lifted the price target to 1,000p from 780p noting the company is approaching the end of four years of negative earnings momentum.The bank estimated that between 2012 and 2016, Aggreko's trading profit will have declined by almost 40%, mostly driven by the roll-off of certain one-off contracts, pricing pressure and a drag from oil and gas."While risks still remain for 2017E, mainly with the well flagged contract renewals in Argentina, we expect an inflection in earnings momentum in 2018E. We see upside with a return to earnings growth," DB said.It sees the company returning to earnings growth in 2018 thanks to improved oil and gas activity, the 1GW of order intake in Power Solutions year-to-date and a lower drag from contract re-pricing, resulting in some margin stability.Deutsche said its 2016 pre-tax profit forecast of £220m is in line with management's guidance of £225m and 2% ahead of Factset consensus of £123m.At 0905 GMT, the shares were up 2.8% to 901p.