said it upgraded PLC () to ‘outperform’ as the mining equipment company has underperformed its European peers by 28% in the last three months and created a buying opportunity.
The company’s fundaments are strong, Credit Suisse said as it raised its recommendation from ‘neutral’.
“We also publish today our Mining Equipment primer and see strong fundamentals for Weir’s mining end market that can see Weir establish status as a higher quality, aftermarket driven, earnings compounder.”
The broker said it also sees an opportunity for free cash flow conversion to improve after the integration of Esco, which Weir bought in 2018, and the disposal of the oil and gas division completed this February.
“We forecast 77% conversion in 2021E-23E compared to cumulative 49% conversion in 2016-20,” it said.