Software group Aveva fell sharply towards the end of last year after a disappointing update.
The company said its enterprise solutions business had seen slower growth thanks to financial problems at one of its customers, a Latin American shipyard, and an oil and gas business deciding not to roll out its software.
But the company is in demand at the moment after a positive note from analysts at UBS. Its shares have jumped 157p or more than 7% to £22.81 after the bank moved from neutral to buy, saying:
Aveva's shares struggled in the fourth quarter of 2013, underperforming as disappointment around the collapse of an anticipated deal in Enterprise Solutions weighed and then as profit warnings across a range of oil services companies rippled out.
We were nonetheless impressed with the performance in the core engineering and design business in the first half, which delivered over 10% like for like growth, despite a continued weak performance in Brazil. We are not betting on a major recovery in Brazil and there is no doubt that the capex outlook in the oil and gas sector is more challenging now, but the proportion of spend that goes on software in the industry is still low, project lifecycles are long and Aveva's own E3D product cycle looks promising.
