Intertek Rises as RBC Sees Prospects for Acquisition Move
Intertek Group Plc (ITRK) headed for a two-month high after Royal Bank of Canada said the product-inspection company is likely to achieve earnings estimates and has “potential” to be involved in acquisitions.
Intertek rose as much as 4.3 percent to 3,218 pence and was trading up 2.1 percent at 3,151 pence at 4:16 p.m. in London, the highest based on closing prices since June 4. Volume exceeded the three-month daily average by 16 percent. The gain propelled the stock to a 1.7 percent increase this year, valuing the company at 5.09 billion pounds ($7.8 billion).
First-half sales jumped 9.5 percent, with growth of 6.3 percent excluding acquisitions, disposals or currency shifts, and gains should improve in the second six months, London-based Intertek said on July 29. The company is also looking at purchases, it said. Management seems “more confident” on maintaining margins in the remainder of 2013 and raising profitability in 2014, said Andrew Brooke, an analyst at RBC Capital Markets.
“The structural growth story is intact at Intertek,” Brooke, who raised his recommendation to sector perform from underperform, said today in a report to investors. “Despite a relatively quiet year to date, there remains significant M&A potential both at the bolt-on and mid-sized level, and we would expect a pick up in activity.”
Of 25 analysts who share their recommendations on the company with Bloomberg, 13 recommend buying Intertek stock, nine recommend holding it and three advise selling.
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