Barclays bumps Wood Group up to 'overweight'

Barclays upgraded Wood Group to ‘overweight’ from ‘equalweight’, keeping its price target at 830p.

“We feel that Wood Group offers investors a combination of both stability and oil price exposure,” it said, adding “If we do see an uptick in oil prices, then we feel that Wood Group is uniquely poised.”

Barclays said the company’s engineering business should benefit from a restart of Brownfield work and the re-emergence over time of Greenfield projects.

The bank said any increase in oil prices could be capped by an uptick in US activity, which should also benefit Wood Group.

“This, if it occurs, would lead us to upgrade numbers far quicker than we would for other sub-sectors and these early earnings revisions should drive the stock. “

As a result, although it sees less upside under a status quo scenario for Wood Group, on which its estimates are based, Barclays reckons its positioning makes it ideal for a more aggressive stance.

At 0945 BST, Wood Group shares were up 2.2% at 669.50p.