Update shared on03 Oct 2025
Fair value Increased 1.22%Weir Group's analyst price target was slightly reduced from £25.70 to £25.50. Analysts cite minor adjustments to growth forecasts and profitability assumptions in their updated models.
Analyst Commentary
Bullish Takeaways
- Bullish analysts highlight Weir Group's ability to maintain its Equal Weight rating despite recent price target adjustments. This is seen as a sign of resilience in its underlying business model.
- Positive sentiment continues regarding the company's strong market positioning, which supports relatively stable long-term growth forecasts.
- Expectations for continued demand in core segments contribute to confidence in the firm's future profitability.
- The relatively small reduction in the price target is interpreted by bullish analysts as indicating limited downside risk at current valuation levels.
Bearish Takeaways
- Bearish analysts express caution over slight downward revisions to price targets, which reflects tempered expectations for earnings growth in the near term.
- Concerns remain regarding margin pressure in a challenging cost environment and its potential impact on profitability assumptions.
- Some analysts question the pace of execution on strategic initiatives, which could influence valuation and investor sentiment if results fall below projections.
- The maintenance of an Equal Weight rating signals uncertainty around the company's ability to outperform peers in the short run.
What's in the News
- Weir Group reiterated its earnings guidance for fiscal year 2025, maintaining a constant currency revenue outlook and raising its operating profit margin target to approximately 20% (Key Developments).
- An additional £10 million underlying improvement in profitability is expected. However, translational FX headwinds are anticipated to offset gains in the second half of the year (Key Developments).
- The Board has approved an interim dividend of 19.6 pence per share, up from 17.9 pence the previous year. The payment is scheduled for 4 November 2025, with the ex-dividend date set for 2 October 2025 (Key Developments).
Valuation Changes
- Fair Value: Increased slightly from £28.29 to £28.63, reflecting higher longer-term valuation estimates.
- Discount Rate: Edged up from 8.81% to 8.84%. This indicates a marginally higher perceived risk in future cash flows.
- Revenue Growth: Projected growth rose from 7.16% to 7.29%. This suggests modestly improved sales expectations.
- Net Profit Margin: Decreased from 13.24% to 13.16%. This points to a small reduction in expected future profitability.
- Future P/E Ratio: Increased from 23.06x to 23.51x. This implies a slightly higher anticipated valuation multiple.
Disclaimer
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