Nearly £700mln was wiped from the value of BAE Systems (LON:BA.) after the United Arab Emirates ruled out acquiring 60 Eurofighter Typhoons.
In early trade the stock dropped 5% to 420.49p, although it stock got as low as 428p.
Broker reaction was understandably quite negative with heavyweight JP Morgan Cazenove repeating its ‘underweight’ rating and 355p a share price target.
“The news is setback and odd in many ways,” the broker said in a note to clients.
UBS, meanwhile, retained its ‘buy’ recommendation but pegged back its valuation 15p a share to 475p.
The Swiss bank is still confident it will land another major order – this time with Saudi Arabia.
“The statement also stated that there is still no agreement on price escalation with Saudi but ‘a timely agreement in the new year would be reflected in trading for 2013’,” said UBS.
“We read this as no agreement by calendar year end 2013, but there is a clear process to contract signature that, if all goes according to plan, will enable it to be recognised in 2013 result.”