Goldman upgrades ICAP after recent falls

Goldman Sachs has upgraded its rating for interdealer broker ICAP from 'sell' to 'neutral', saying that cyclical weakness is now being reflected in its share price."Shares in ICAP have recently underperformed peers in the diversified financial sector as volume weakness has weighed on investor expectations," Goldman said.Since adding the stock to its 'sell' list on January 10th, the stock has fallen by over 13%, compared with just a 1.4% decline for the FTSE World Europe index and a 0.8% fall for other diversified financials."After recent weakness in the shares there is insufficient downside to our 12-month price target relative to our coverage and we therefore upgrade ICAP to 'neutral'."The target price has been left at 440p.However, Goldman said that for the stock to appreciate materially from current levels ICAP needs to show that it can benefit from the current "structural flux in the industry", both in terms of top-line growth and better returns.The share price was 5.3% higher at 420.22p by 11:01 on Tuesday.BC