Companies: CHG    CWM    POL   

Despite reducing its full year forecasts for management and IT consultancy Cornwell in recent days, broker Arbuthnot continues to rate the stock as a strong buy.

The minor adjustment – which saw analyst Robert Sanders reduce his full year profit predictions from £2.9 million to £2.7 million – came as something of a surprise, as Cornwell’s first half results were in line with expectations. ‘The private sector has not performed as well as anticipated,’ Sanders explained of the decision to downgrade, ‘and this has a knock-on effect on profits.’ That said, he maintains the shares are well worth 180p each and that the current 145.5p price leaves plenty of upside potential.

Sanders remains more cautious – for the time being at least – towards mini technology conglomerate Polaron. On the back of its acquisition of DMS Controls he agrees that ‘the deal is very complementary’ and that ‘there should be significant cross-selling opportunities’. He retains a neutral rating, however. A more detailed review of the business (including forecast and recommendation revisions) is expected from Arbuthnot in the not-too-distant future.

Over in the defence sector, and in spite of an acquisition of its own, Chemring is rated as one to reduce. Analyst Toby Thorrington believes the acquisition of German materials firm COMET is promising, but describes it as only ‘a small step in the right direction.’ This year profits are anticipated to rise from £14 million to £16.9 million but, Thorrington suggests, ‘exposure to the civil aircraft cycle holds greater attractions’.