Broker snap: UBS ups target for Wood Group

UBS believes that the post-results share price fall for oil services engineering group Wood Group represents a good buying opportunity and has raised its target price for the stock from 730p to 810p.Wood Group reported on Tuesday that profit from continuing operations before tax and exceptionals increased 62.7% to $254.1m, compared with $156.2m the year before. 'Continuing operations' include PSN since the acquisition in January 2011 and excludes the Well Support division which was disposed of in February. Total revenue rose by 19.5% from $5,063.1m to $6,052.3m, which includes Well Support activity up to the date of disposal. Revenue from continuing operations increased by 38.7% from $4,085.1m to $5,666.8m. UBS says earnings were in line with estimates, but with net interest charges and the tax rate being lower than expectations, adjusted net income was ahead of forecasts.The broker has increased its earnings per share (EPS) estimates for 2012 and 2013 by 6/7% to reflect the adjusted net income beat along with a lower share count.Nevertheless, shares took a tumble after the announcement. When including today's 3.06% rebound, the stock still stands nearly 5% lower than where it was last week."We believe [Tuesday's] negative share price reaction was largely due the wider negative market sentiment and also because of a reversal of what some investors thought was a likely promotion into the FTSE 100."On the back of good EPS momentum and strong underlying trends, we think the pullback presents an attractive buying opportunity," the broker said.BC