Goldman Sachs cuts Weir Group forecasts and target price on mining pump market-share concerns, keeps Neutral

Overview

Goldman Sachs maintained its Neutral rating on Weir Group but lowered its 12-month target price from 3,050p to 2,840p because of rising market-share risk in the mining pumps business. The key concern is that Weir's recent growth shortfalls may not simply be cyclical, but could reflect intensifying competition and share loss in its high-quality, high-aftermarket-intensity mining pump product line.

Core views

The report argues that Weir's pump business is an important support for the group's valuation, because pump products have a 'razor-and-blades' business model, with aftermarket spares and wear parts contributing a large share of lifetime value. Since 2023, FLSmidth has emphasized taking share in pumps and reported strong growth in its PC&V business in 1Q26; meanwhile, Weir Minerals AM has shown weak OOG performance for three consecutive quarters. Goldman therefore cut its Minerals OOG forecast, group sales forecast, and FY26/27e adjusted EPS, and will wait for evidence of demand improvement and share retention before turning more positive on the stock.

Analysis framework

The analysis primarily combines company operating updates, FLSmidth's PC&V performance, the order growth trend in Weir Minerals AM, comparison against Visible Alpha consensus, and Goldman Sachs' EV/IC to ROIC/WACC valuation framework. The target price is composed of 85% weight from the sector-relative EV/IC to ROIC/WACC method and 15% weight from the M&A valuation component.

Methodology notes

• Valuation methodsEV/IC to ROIC/WACC

  A valuation framework based on the relationship between invested capital multiples and returns on capital versus cost of capital

  Goldman lowered the fundamental valuation multiple from 1.7x to 1.6x, reflecting greater caution on potential share loss in mining pumps; the revised target price implies 12.5x next-12-month ex-M&A EV/EBIT.

• Valuation methodsM&A Rank

  M&A likelihood score

  Weir's M&A Rank is 2, indicating a medium probability of M&A; Goldman retains a 15% M&A valuation weight in the target price, using a 17.6x next-12-month EV/EBIT precedent transaction multiple.

• factor_profileGS Factor Profile

  Goldman compares stocks versus the market and sector peers across four attributes: Growth, Financial Returns, Multiple, and Integrated

  This framework provides investment context, but the report's main rating and target-price changes come from lower earnings forecasts, competition risk assessment, and a lower valuation multiple.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Weir Group equity (WEIR.L)

  research target

  Strengths

  The mining pumps business has a high aftermarket intensity, and spares and wear parts generate relatively recurring revenue; the pump business is an important support for the group's margins and valuation.

  Weaknesses

  Minerals AM has shown weak OOG performance for three consecutive quarters, down 3% in 1Q26, raising concerns about market-share loss.

  Comparison

  FLSmidth's PC&V business posted 16% OOG growth in 1Q26 and 12% growth in FY25, clearly stronger than Weir Minerals AM.

  Risks

  Rising competition, FY26 guidance risk, delayed mining customer capex, weaker-than-expected price-cost recovery, and weaker-than-expected M&A synergy realization.

• FLSmidth PC&V

  competitive reference

  Strengths

  It reported strong growth in its Pumps, Cyclones & Valves business and said it is taking share.

  Weaknesses

  The report does not discuss its margins or long-term sustainability in detail.

  Comparison

  Its 1Q26 and FY25 OOG growth were both significantly higher than Weir Minerals AM's.

  Risks

  If its growth is confirmed to come from share gains, it will add pressure to valuation of Weir's core pump business.

Key data

• RatingNeutralNeutral maintained.
• 12-month target price2,840pLowered from 3,050p.
• Implied upside15.4% to roughly 16%The report cover shows Upside: 15.4%, while the valuation section states about 16%.
• FY26/27e adjusted EPS changeabout -1% / -2%Driven by the lower Minerals AM forecast.
• Minerals OOG forecast changeFY26/27 cut by -60bps / -50bpsReflects concerns about potential market-share loss.
• Group sales forecast changeabout -50bps / -150bpsThe Minerals OOG adjustment flows through to group sales.
• Weir Minerals AM 1Q26 OOG-3%Weak performance for three consecutive quarters.
• FLSmidth PC&V OOG1Q26 +16%; FY25 +12%Strong growth in the competitor's Pumps, Cyclones & Valves business heightens market-share concerns.
• Valuation multiple1.6xPreviously 1.7x, used in the EV/IC to ROIC/WACC framework.
• Fundamental valuation2,650p/shareExcluding the M&A contribution, the upside potential is about +9%.
• Market cap and enterprise valuemarket cap about £6.4bn / $8.6bn; enterprise value about £7.5bn / $10.1bnDisclosed on the report cover.

Impact & implications

The report is cautious on Weir: although the stock has underperformed materially over the past three months and the valuation is therefore more attractive, Goldman believes investors need clearer evidence of demand improvement, re-acceleration in second-quarter growth, or large order wins before concluding that mining pump share has not been damaged. There is still upside to the target price, but part of it comes from the M&A component; excluding that contribution, the fundamental upside is only about 9%.

Risks

• Mining customer FID approvals could come faster or slower than expected, leading to capex improvement or delay.
• Competition is increasing in key product areas, especially pumps.
• Price-cost recovery may fall short of expectations, affecting margins.
• Sales synergies from recent technology-focused acquisitions may be realized better or worse than expected.
• An escalation or easing of the Middle East conflict could affect demand.
• If Weir's weak growth persists, FY26 guidance could face downward revision risk.

What to watch

• Whether growth re-accelerates in 2Q.
• Whether there are large order wins proving demand improvement and share retention.
• Subsequent OOG performance of Weir Minerals AM.
• Whether FLSmidth PC&V continues to post strong growth or further claims share gains.
• Whether Weir can achieve the roughly 50bps year-on-year margin expansion implied in its FY26 margin guidance.
• Whether Visible Alpha consensus follows and cuts FY26/27 EPS.