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Broker snap: KBC Peel Hunt upgrades Rotork

KBC Peel Hunt has taken Rotork off its sell list after the engineer's results earlier this week.

The broker has bumped up its 2010 forecasts substantially and is now predicting profit before tax of £97.7m, compared to £79.1m previously and a market consensus of £88m, and underlying earnings per share of 79.3p, up from 64.2p previously (consensus: 75.3p).

'Our previous stance was based on a bearish top down scenario playing out for Rotork in 2010. While the group year-end order book of £129m is down 17% organically YoY [year on year], management are of the view that the group will deliver low to mid single digit organic revenue growth in 2010,' KBC analyst Jonathan Hurn said.

Hurn is assuming 3.6% revenue growth 'accompanied by profit drop through on a group wide basis of 32% and in line with the historic trend.'

The broker has upgraded the stock from 'sell' to 'hold' and has cranked up the price target to 1400p from 1100p.

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