logo-loader
viewMeggitt PLC

Meggitt downgraded as Citi says shares “approaching fair value”

The investment bank said the share price was now "more reasonable", having surged 14.6% over the last 12 months

Meggitt PLC - Meggitt downgraded as Citi says shares “approaching fair value”

Defence firm Meggitt PLC (LON:MGGT) has been downgraded to ‘neutral’ from ‘buy’ by analysts at Citi as the bank said the company’s valuation was “more reasonable” after a strong performance in the shares.

In a note on Monday, the investment bank, which rates the FTSE 100 group with a target of 730p, added that the stock had been “potentially stretched by M&A speculation”, although they still predicted earnings (EBIT) ahead of market consensus for the 2019 financial year, saying the firm’s guidance for the civil aftermarket division contained “some conservatism”.

READ: Meggitt upgrades 2019 revenue forecasts as US market boosts defence business

Citi also said supply chain pressures alongside the temporary halt in the production of Boeing Co’s (NYSE:BA) 737 MAX aircraft created “some uncertainty to the 2020 outlook”.

Meggitt currently supplies spares parts to Boeing for the MAX aircraft and warned in November that the grounding of the planes would place a cap on its operating margins for 2019.

Citi’s assessment sent shares in Meggitt down 1.4% to 637.2p in lunchtime trading.

Quick facts: Meggitt PLC

Price: 281.5 GBX

LSE:MGGT
Market: LSE
Market Cap: £2.19 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Matador Mining Ltd nearing release of scoping study for Cape Ray gold project

  Matador Mining Ltd's (ASX:MZZ) executive director Adam Kiley tells Proactive's Andrew Scott they're getting to close to announcing a scoping study for its Cape Ray Gold Project in Newfoundland, Canada, which is expected to be released 'later this quarter'. ''Also in the past quarter...

23 hours, 22 minutes ago

2 min read