Petrofac shares gain on FTSE after broker upgrade/reiteration

The share price is up 3.86 pct to 1,158 on today's latest trading, at 2:49pm, adding 43p since yesterday.

The rise has been helped in part by a series of broker recommendations from RBS and Nomura.

Both companies rated the shares a buy, with RBS upgrading, whilst Nomura was reiterating its target of 1,240p/share.

Further investment in oil and gas projects, along with a double order backlog makes the company attractive to RBS and Nomura.

"By spinning off the Don assets into EnQuest, Petrofac is effectively providing a distribution to shareholders of close to $600 million (based on our estimates)," said RBS after last weeks news that Petrofac and Lundin Petroleum would spin-off their assets in a new venture called EnQuest.

This meant that Petrofac is effectively 'providing room' for close to $600 million worth of new shares, said RBS who upgraded their target price for the exploration provider to 1230p/share.

"Petrofac remains one of our top picks for quality long-term exposure to the onshore construction market, in which we expect deman to remain robust for the foreseeable future." said Nomura analyst, Iqbal Nasim.

"We believe the company's superior visibility warrants a premium and that further upside will be crystallised as contracting activity picks up from 2Q this year." Nasim concluded.