Broker snap: JPM lifts Invensys price target after payout
JP Morgan has lifted its price target on Invensys to 335p from 295p, ahead of the engineer's full year results on 15 May.
JPM, which keeps its 'underweight' rating on the stock, said that 28p of the rise is accounted for by £95m the company received from a settlement with the London Underground operator Metronet.
Signalling work that Invensys had been contracted to undertake was rescheduled after Metronet went into administration last year. Invensys received £95m from French engineer Bombardier as part of the settlement.
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JPM said it was looking for sales of £585m in Invensys' full year results, as well as operating profit before restructuring and exceptionals of £80m and net income of £115m.
It said it was raising its 2008 earnings per share estimates by 31%, mainly due to the Metronet settlement and its 2009 estimates due to updated foreign exchange rates and higher margins in rail following the group's positive guidance on April 1.
The broker said it was keeping its 'underweight' rating on the stock because it saw less growth potential than the average for the sector.
