Jefferies initiates coverage of James Fisher at 'hold', says valuation full

Jefferies initiated coverage of James Fisher at ‘hold’ with a 1,570p price target.

It said the provider marine engineering services comprises a unique portfolio of niche activities with typically strong market positions across marine, oil & gas and other ‘high assurance’ sectors.

Jefferies pointed out that over the longer term, management has delivered a history of compounded earnings per share and dividend per share growth, supported by an M&A strategy to broaden the group’s footprint of specialist services.

“The group has been successfully positioned to capture niche roles in large and active end markets. However, we suspect investors may have over-extrapolated the value of a series of large contract wins during 2016, leaving little room for a further re-rating in the group’s current valuation for now.”

The bank said its hold rating reflects that full valuation, but added that it has no doubt James Fisher “represents a unique, intriguing, well managed and quality proposition, with multiple opportunities to capitalise on ahead”.

At 1445 GMT, James Fisher shares were down 3.6% to 1,540p.