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Liberum upgrades BBA Aviation due to attractive valuation, prospects

Shares in BBA have fallen more than 15% in the last year due to concerns about ongoing softness in the US business and general aviation market
A private jet after landing
Liberum believes the recent share price fall has created an attractive entry point into BBA

Stockbroker Liberum has upgraded its recommendation on BBA Aviation PLC (LON:BBA) to ‘buy’ from ‘hold’ due to its recent share price fall and long-term growth outlook.

Shares in the aviation support and aftermarket services provider have fallen more than 15% in the last year due to concerns about ongoing softness in the US business and general aviation market.

READ: BBA Aviation loses altitude as it cautions on soft US market

Earlier this month, BBA reported that its first-half underlying earnings (EBITDA) were largely flat at US$204.9mln and said it was confident of growing the business this year.

In a note to clients, Liberum analysts said the recent share price fall has created “an attractive entry point” into a structural growth story with continued capital allocation improvements. The broker, which also upped BBA’s price target to 370p from 350p, said BBA’s long-term growth outlook remained intact and that its plan to sell its engine repair and overhaul business was attractive.

Shares in the company were 0.6% up at 313.60p in mid-morning trade.

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