Shares digital

by Dan Coatsworth

Having seen its share price drop 30% in the first seven months after listing in June 2007, energy services group Eaga now warns of rising costs in social housing, where there is less high margin installation work and increased cost of repairs.

Ian Jermin at Landsbanki has slashed his target price to 145p from 179p, saying it is uncertain how long it will take to pass on extra fuel and copper costs to local authority clients. He says the management’s ability to execute programmes will be questioned. However, Jermin says the recent share price reduction supports a move from ‘reduce’ to ‘hold’.

Joe Brent at Citigroup has reduced his price target to 160p from 180p. He believes growth in CERTS (Carbon Emission Reduction Targets) will not be enough to offset higher than expected mobilisation costs in social housing, delays in heating insulation and rising raw material costs. Panmure Gordon’s Henry Carver is more positive long-term, reiterating his ‘buy’ rating, although cutting the target price from 230p to 190p.