RBC Capital upgrades Rotork to 'outperform'
RBC Capital Markets upgraded on Tuesday to 'outperform' from 'sector perform' as it pointed to the fact the valuation is at the low end of its 10-year range.
The bank noted that Rotork shares have fallen in line with its sector over the last three months, but said it sees its business mix as more resilient, both in terms of end markets in general and specific tariff risks.
"Absolute EV/EBITA and price-to-earnings are both close to 25% discounts to their 10-year average and both absolute and relative valuations are at or below the low ends of their 10-year ranges," said RBC, which kept its price target at 370p.
It said that Rotork's direct tariff risk is limited, given a local-for-local business model for both assembly and its supply base.
"The company also has had a good track record of passing prices through to customers, including during the first Trump administration and post-Covid," it said.
At 1340 BST, the shares were up 1.9% at 298p.
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