Investors await Greek developments and eurozone GDP, but China calmerLeading shares are attempting to edge higher after the week’s ructions caused by China’s surprise devaluation of its currency.With the central bank trying to stabilise the yuan - setting the rate a little higher this morning - a measure of calm has returned. But investors are still nervous as the Greek bailout talks continue - the proposals have just been passed in the Greek parliament but face scrutiny by the Eurogroup of finance ministers later - and ahead of eurozone GDP and University of Michigan confidence figures.We see continued risk to earnings despite consensus 2015 earnings per share declining by 35% year to date. Minerals has the capacity to disappoint driven by slowing high-margin aftermarket revenues. Despite slashed expectations, oil and gas can still weigh given $43 [West Texas crude price].Weir is working hard to cut costs and is leveraged into recovery. End markets are yet to stabilise though so this is about timing. We cut 2015 earnings per share by 16/10% and are 10% below consensus. A 2016 PE of 16 times.... looks expensive. Our target price is reduced to 1330p [from £14.50]. Sell. Continue reading...
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