LONDON (ShareCast) - Half year results from Invensys (LSE: ISYS.L - news) were not enough to justify the high rating of shares in the
engineering group, in the view of Charles Stanley, which remains bearish on the stock.
'Optimists will hope that these results reflect the bottom of the cycle and that strong cash generation and an improving balance sheet might provide room for manoeuvre going forward. However, we remain concerned that despite efforts to reduce cyclicality, parts of the business (especially Invensys Operations Management, IOM) continue to be adversely affected by the sharp deterioration in corporate capex, a trend we see few signs of turnaround from recent economic data releases,' notes analyst Jeremy Batstone-Carr.
The broker wants to see 'more concrete signs of turnaround' before upgrading its estimates. It maintains its 'reduce' recommendation on the shares.
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