LONDON (ShareCast) - (Sharecast News) - Analysts at Canaccord Genuity lowered their target price on marine engineering services provider James Fisher from 625.0p to 550.0p on Monday, citing cyclicality as their primary concern.
Canaccord Genuity said James Fisher's business mixed multiple end markets - oil & gas, renewables, defence, nuclear, and civil - and highlighted that the past two years had been "challenging" for the group, with significant falls in margin, principally due to lower project activity due to the Covid-19 pandemic, certain sanctions-related impacts, and a number of internal goals.

However, the Canadian bank believes much of the difficulty has now been put behind the group, and that all of its key markets were now getting stronger over the next 12 months.

In addition, Canaccord also highlighted that Fisher generates a "significant part" of its revenue in USD and NKr, and said it also expects strength in USD to act as "a material tailwind" in the second half.

"Stronger earnings will go a long way to addressing concerns around the group's balance sheet; we expect peak net debt to be reached at the end of this year at 2.6x EBITDA, and for free cash flow to be strong enough in 2023E to reinstate the dividend," said Canaccord, which reiterated its 'buy' rating on the stock.

"We are cutting earnings, and our target to 550.0p (was 625.0p), but we are increasingly confident in the outlook for Fisher given the cyclicality of its end markets."



Reporting by Iain Gilbert at Sharecast.com

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE