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Shares in engineering consultant WS Atkins are rated only ‘market perform’ – a neutral stance at best – by WH Ireland’s John Cummins. Maintaining a £10.60 target for the £10.40 shares and acknowledging Atkins’s strong market positions, he points out that the company already trades at a ten per cent premium to the consultants sub-sector and regards the shares as ‘presently fully valued’.

His comments accompanied an upbeat trading missive from Atkins noting that annual profits to March came in ‘towards the top end of expectations’ and which contained news of a strong order book.

office2office’s significant scale
Elsewhere, he upgraded his numbers and price target for business supplies group office2office following its proposed takeover of AIM counter TripleArc. Raising his target price from 190p to 230p, he sees the £26 million takeover providing ‘significant scale’ to the existing print management operations, while ‘more importantly’ taking the company into ‘a number of interesting areas of the private sector outsourced services market’.

Upgrading his two-year earnings estimates, Cummins maintains a buy stance on office2office. For 2008, he forecasts pre-tax profits of £13 million (2007: £11.6 million), earnings of 25.1p and a 10.4p dividend, placing the 161p shares on a current year price-to-earnings ratio of just 6.4 times, with a 6.5 per cent yield.

On AIM, the broker takes an unsurprisingly bullish view on corporate client Avacta, the York-based biophysics group developing detection and analysis technology. Noting a 42 per cent reduction in interim losses on a threefold revenue increase, WH Ireland reiterates its buy stance on the company, currently commanding a £36 million market cap.