Espirito Santo was suitably impressed with GKN’s (LON:GKN) Fokker capture that it has upgraded the British engineering group to ‘buy’.
Analyst Nick Wilson revealed he had a sense of déjà vu when briefed about the deal, which apparently is a good thing given the success of GKN’s 2013 acquisition of Volvo Aerospace.
“We attended the GKN analyst meeting and were hit with a strong case of déjà vu. It was nearly three years ago that GKN closed the acquisition of Volvo Aerospace to create a new engine and structures Aerospace business,” he said in a note.
“Fokker is being added to this business, providing an important new Technology area in terms of Electrical Systems. GKN believes that Electrical Systems will be increasingly combined with a plane’s physical structure and hence there are good cross-selling opportunities for it.”
Credit Suisse, which repeated an ‘outperform’ rating, however, had to reduce its earning’s forecast for GKN as it anticipates foreign exchange impacts and reduced growth for the group’s driveline and powder material units.
Following Hikma Phamaceutical’s (LON:HKA) acquisition of generic drug maker Roxane, Jefferies upgraded the UK listed group to ‘buy’.
Hikma is now considered by Jefferies to be the preferred ‘name’ in the generics business, and accordingly the broker’s price target increases to 2615p from 2134p.
“In our view Hikma is transitioning to a period of remarkable growth as it executes on recent acquisitions and we expect share price momentum to continue despite the 12% rally,” said analyst James Vane-Tempest.
RSA (LON:RSA) needs the Zurich (or another) deal to work, according to Barcalys Capital analyst Andy Broadfield, who expects the mooted offer from Zurich to be ‘very credible’.
It is important for the London listed insurance group to ‘grab the opportunity’, he added.
Meanwhile, fellow Barclays analyst Toni Dang highlighted increasing outflows out of Ashmore group’s funds under management, and said there was risk that the trend would continue.
Barclays repeated an ‘underweight’ rating for Ashmore (LON:ASHM) and reduced the target price to 260p from 280p.