MORE than £178.4 million was wiped off the value of Glasgow-based engineering giant Weir Group yesterday, after a cut in Royal Bank of Canada's price target led the stock to continue on its five-week fall.
RBC analyst Andrew Carter reduced his target for the stock from 2500p to 2400p, amid concerns among investors about demand from the fracking industry for Weir equipment. His target is still well ahead of Weir Group's current share price of 1705p, after an 84p or 4.7% decline yesterday.
This values the company at a total of £3.6 billion. It has fallen from 2236p since the end of February.
Analysts are divided over whether investment in the nascent fracking industry, in which liquid is injected into rocks at high pressure to release the oil or gas they contain, will fall due to the recent gas price decline.
But Mr Carter remains among the more bullish in the sector.
He said: "The outlook for Weir's upstream original equipment pumps business has been of significant investor interest in recent weeks.
"It is important it is kept in perspective however – we estimate it only represented 9% of group sales in 2011."
He predicts a 15% fall in fracking equipment sales this year, offset by 30% growth in the after-market.
He has cut his earnings estimates for the group by between 5% and 6%.
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