Shares in the oilfield services group rose were up almost 4% to 491p in early afternoon trading, after analysts at the venerable German investment bank moved their recommendation to ‘buy’ from ‘hold’.
The number crunchers also hiked their price to 590p, from 560p previously.
“We believe that the group’s sharp underperformance this year has been driven by fears around cash generation, which have largely been as a result of the Amec Foster Wheeler acquisition,” said Berenberg in a note to clients.
“As cost synergies are delivered and legacy projects and exceptional integration costs roll off, we expect steady top-line growth underpinned by strong FCF, leaving the stock attractively valued.”
Berenberg increased its earnings estimates by 2% for the current year and by 7% for next year, “due to higher margins assumed”.
It now expects earnings of 37p per share on sales of £11.55bn in 2019, followed by earnings of 42p per share on sales of £12.04bn in 2020.