Cobham Group PLC (LON:COB) shares rose on Monday as Morgan Stanley upgraded it to ‘overweight’ from ‘equal-weight’, and said it sees an improved risk-reward following a challenging period.
The US investment bank also increased the British defence contractor’s price target to 150p from 115p.
READ: Cobham trading in line but outlook still uncertain
In a note to clients, analysts at Morgan Stanley said they think that current management has stabilised Cobham’s performance, with necessary costs sunk and measure taken to aid operational delivery.
“With multi-year upcycles beginning in core defence and aerospace markets, and other niche exposures appearing to be at or close to the bottom, we see consensus underpinned,” the analysts said.
They added: “We model EBITDA margins to improve to 13.5% in 2020 against medium-term targets of 12%-14%.”
In morning trading, Cobham’s shares jumped 5.7% to 131.55p