Many investors like to follow the views of leading sell-side research desks oR professional stock brokers in deciding what shares they should buy or sell. One of the world's most famous capital markets players in Goldman Sachs recently tipped Worleyparsons Limited (ASX: WOR) shares as a buy with a $17 "share price target".
The analysts are particularly bullish after the engineering group completed the giant $4.5 acquisition of Jacob's Engineering Group's chemicals and resources division. Worley's management believes they can find cost savings of between $130 million to $160 million within two years as a result of the merger.
Goldman's also sees benefits from the deal: "Jacobs provides solid earnings' diversification to WOR, shifting the company from ~62% upstream O&G (oil and gas) exposure in FY18 to 44% in FY20E, a positive for WOR's through-cycle valuation in our view."
Today Worley shares change hands for $15.24 meaning they have some upside over the next 12 months if Goldman's analysis is on the money.
