Citi upgrades Intertek to 'buy'

Analysts at Citi upgraded their rating on testing laboratories company Intertek to 'buy' on Tuesday, citing further conviction in the firm's resources margin outlook.

Citi stated that Intertek's trade and resources unit was "underappreciated, with its new rating on the stock being based on a view that consensus does not fully factor in operational leverage on any recovery within the trade division - or the potential for the group to benefit further from increasing energy capex than the market expects.

"Today, we highlight (i) further conviction in the margin and growth outlook within the resources division; and (ii) the regulatory and innovation backdrop remains solid for products, especially given easy 2023E comps," said Citi.

"We raise our FY23E EBITA forecast 3% to £635.0m, with FX a further tailwind. This is 10% above Visible Alpha consensus."

Reporting by Iain Gilbert at Sharecast.com