LONDON (ShareCast) - (Sharecast News) - Citi upgraded Weir Group on Monday to 'buy' from 'neutral' and lifted the price target to 2,900p from 2,130p as it highlighted two core elements to its 'buy' case.
Firstly, Citi said exposure to the mining end-market offers the opportunity for idiosyncratic earnings growth over and above a soft macro environment.

"Our proprietary mining survey suggests that mining capex intentions remain positive, while we expect mining production to remain resilient, both helped by favourable commodity prices (particularly copper and gold)," the bank said.

Secondly, Citi said Weir looks structurally undervalued for a company of its quality and that its multiple "has yet to truly reflect its self-help journey".

Citi said: "Our work inside on benchmarking and valuation indicates potential for circa 15% re-rating potential at Weir given its return on capital employed and free cash flow margin profile; robust relative growth can be a catalyst."

At 1025 BST, the shares were up 1.7% at 2,542p.

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