Panmure downgrades Devro due to 'deteriorating volume visibility'

Panmure Gordon has downgraded its rating for sausage skins maker Devro from 'buy' to 'hold' on the back of 'deteriorating volume visibility' after a gloomy outlook from the firm."Despite full-year 2013 results being in line with our expectations the company has provided a disappointing outlook statement citing poor volume visibility in developed markets and increased FX headwinds in 2014," said analysts Damian McNeela and Graham Jones."As such we are lowering our earnings per share (EPS) forecasts by 12% and 8% in 2014E and 2015E respectively."These reductions would equate to a 5% fall in adjusted pre-tax profit this year to £38.7m and a 5.5% decline in EPS to 19.4p. McNeela and Jones said that they remain attracted over the medium-to-long-term to the macro drivers of rising per capita meat consumption and believe that Devro is well placed to "capitalise" on this growth. Even so, given the lack of near-term visibility in developed markets and the magnitude of the downgrades they cut their recommendation on the shares to 'buy' from 'hold'.The 350p target price for the stock was maintained.The stock as down 8.8% at 278.1p by 12:55 on Tuesday.BC