The fall in the price of crude oil to well below US$30 a barrel is likely to hit hard marginal US shale plays in states such as Texas.
This, in turn, is expected to impact significantly suppliers such as Weir.
Deutsche, in a note reviewing its calls on the capital goods sector, moved to ‘hold’ from ‘buy’ on Weir’s stock, cutting its price target to 950p from 1,300p.
“The US headwinds its oil and gas division is set to face makes the business’ outlook particularly uncertain, while its balance sheet and liquidity reserves are the weakest in our universe,” Deutsche clients were told in a note to clients.
In morning trade, the shares were 4.5% lower at 709.2p each.