Weir rallies on Morgan Stanley upgrade to 'overweight'

Engineer Weir rallied on Monday after Morgan Stanley upgraded the shares to ‘overweight’ from ‘equalweight’ and hiked the price target to 2,220p from 1,730p.

The bank said it sees a "solid end market setup for 2021" and that the recent 10% pullback provides an attractive entry point. The risk/reward screens well in a sector context, MS said.

Morgan Stanley said Weir's announced sale of its oil and gas division to Caterpillar last year was an important and clear change in direction, allowing the company to focus on its highest quality assets, serving mining.

MS noted that since the sale was announced in October, the shares have been strong outperformers, up 48% versus the FTSE 350 engineering index up 16%.

"It's clear the market has rewarded this strategic move," MS said.

At 1310 GMT, Weir shares were up 4.9% at 2,021p.