LONDON (ShareCast) - (Sharecast News) - Shore Capital has reiterated its 'hold' stance on shares of Spirax-Sarco after the company disappointed the market with its first-half results, saying the stock is "full valued" for now.
The engineering group, which specialises in thermal energy management and niche pumping equipment, said adjusted operating profits were down 13% organically at £171.7m, below the company-compiled consensus estimate of £176m.

It also forecast that full-year sales would grow between 0% and 4% in 2023, which Shore Capital predicts will prompt a 5% downgrade to current consensus estimates for adjusted operating profits.

"The weakness in Watson-Marlow sales from the BioPharma sector was anticipated but we believe the extent of the downgraded guidance is greater than both the buy side's and the sell side's expectations," Shore Capital wrote in a research report on Thursday.

In terms of the share price, the broker explained that the stocks trading a 29 times forward earnings as of Wednesday's closing price.

"We consider the shares to be fully valued, although they have previously traded on a higher rating. They currently trade at a lower than usual premium to the sector average. However, the sector premium is considerably higher than average versus other sectors (>30% versus a 15-20% average premium)."

The stock was trading 5.5% lower at 10,245p by 1117 BST.

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