Nomura has kept its 'neutral' rating and 1,950p target price for engineering solutions giant Weir after a broadly in-line set of 2012 results.

Sales (up 11% at £2.54bn) missed consensus expectations by 2.3%, but margins of 19.1% beat the 18.6% forecast, leading to an in-line operating profit, the broker explained.

Nomura highlighted Weir's better-than-expected outlook, which guided to stable margins in 2013 and low single-digit growth "which to us seems supported by the recently acquired businesses in oil and gas".

"Consensus is going for 2.5% growth and margins of 18.6% for FY13, so we could see 1-2% upgrades to consensus FY13 earnings per share [estimates] if margin assumptions move to the 19.1% level on slightly lower base sales."

Nevertheless, the broker retained its 'neutral' stance on the stock, saying that the shares were performing strongly ahead of the results, up 11% relative to the sector over the past month.

"We see the results as a non-event, confirming the well-expected slowdown in oil and gas and some caution on the Minerals outlook."

The figures were well-received by the market, with shares trading 0.96% higher at 2,184.81p by 10:21.

BC

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