Broker Investec maintained its "hold" recommendation for Wood Group (LON:WG) and said it continued to believe better value lay elsewhere in the sector.
Wood Group provides services to the oil, gas and power generation services.
The firm announced today it had delivered good growth in the first four months of the year and anticipated that performance for the full-year will be in line with expectations.
It said following the purchase of PSN and disposing of the well support division, it was set to grow as an engineering business with strong market positions in upstream, subsea and pipelines, a production facilities support provider (Wood Group PSN), and as an industrial gas turbine aftermarket provider (Gas Turbine Services).
In a note, Investec said that the trend in the engineering division had continued. Delays, however, in progression of certain projects for this segment have been noted, added the broker.
In production facilities activity (to be called Wood Group PSN), while North Sea activity is "reasonable", there may be some future project delays due to recent tax changes as field economics are re-considered, it said.
Strong demand from US shale continues, but performance in Australia and Oman has been adversely impacted by slow start-up on certain contracts. The integration of the PSN business is continuing, with trading in line, said Investec.
Referencing the division GTS - while benefiting from cost reductions, an improving power market outlook and good progression on power solution contracts, the division has been adversely impacted by test cell downtime and some overhaul delays in the middle east and north Africa, although there are some more positive aftermarket signs, said the broker.
Investec said it maintained its "hold" recommendation for the stock and maintained its price target of 689p per share (current price: 672.95p).
Meanwhile, broker Evolution Securities increased it's target price for Wood Group to 700p (from 650p), but said North Sea potential slowdown may be a concern. The analyst added he expected better growth prospects and potential for outperformance elsewhere in the sector.