Oxford Instruments slumps on Goldman downgrade

Shares in Oxford Instruments fell sharply after Goldman Sachs downgraded the stock to ‘neutral’ from ‘buy’, noting it's trading close to the bank's unchanged 700p price target.

The brokerage said that since being added to the ‘buy’ list on 26 September 2012, the stock is down 49.4%, compared to the FTSE World Europe up 19.9%.

For full-year 2016, Goldman said it expects adjusted earnings before interest and tax of £43m, compared to Reuters consensus of £45m.

“Weak demand in both the nanotech tools and industrial products business have impacted the shares, and more recently signs of price pressure related to overcapacity in superconducting wire,” it said.

Goldman said the group has developed a strong portfolio in the area of nanotech tools. This is a niche market and while it is vulnerable to high short-term volatility, it could offer attractive long-term growth potential and/or strategic attractions for larger instrumentation suppliers, it added.

At 1013 BST, shares in Oxford Instruments were down 8.4% at 607.48p.