Panmure Liberum lifts Rotork target price after strong Q3 update
Panmure Liberum has raised its target price slightly for Rotork Plc after the flow control and instrumentation group's strong third-quarter update this week, expressing confidence in the company hitting full-year targets.
The broker lifted its target price from 360p to 370p and kept a 'buy' rating on the stock.
Rotork's third-quarter order intake was 6% higher than last year on an organic constant currency basis, rising to 8% when including the contribution from Noah Actuation, which was acquired earlier this year to expand Rotork's geographical coverage in Asia Pacific.
However, the company needs a pickup in momentum over the fourth quarter if it wants to meet analysts' expectations this year, Panmure Liberum said, after orders grew by just 3.3% in the first half. To hit consensus estimates for a 5.1% full-year increase in orders, second-half orders need to grow by 6.9% overall.
"Despite a strong Q3, Rotork still requires another quarter of strong growth. Though, at this stage in the year we are confident that management has sufficient visibility in delivering," the broker said.
Rotork also announced plans for a new £50m share buyback programme, which Panmure Liberum estimates will deliver 1.7% and 2.2% earnings per share accretion over FY26 and FY27, respectively. While the broker has cut its net cash estimates as a result of the buyback, it said that "plenty of firepower remains".
Rotork shares were more or less flat at 340p by 1159 GMT, having jumped 4% the previous day.
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