SPIRAX-SARCO bounced back from recent selling on the view that the industrial equipment maker looks cheap relative to its engineering peers.
The sustained strength of energy prices has prompted Credit Suisse First Boston to take a second look at the Cheltenham-based company. Spirax-Sarco is a world leader in making equipment, such as pressure controls, that enables manufacturers to make the most of steam and water.
Given that Spirax-Sarco’s products lower energy costs, the Swiss broker says that the company will face improving demand. Taken together with the strength of the company’s franchise, strong cash generation and the potential to make bolt-on acquisitions or return cash to investors, Patrick Marshall, analyst, has moved from “neutral” to “outperform” with a 750p target, against 600p previously. The shares