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: 290.3 GBX

LSE:MGGT
Market: LSE
Market Cap: £22.16 m
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

Enthusiasm of Belvoir Group franchisees during crisis has been incredible...

Dorian Gonsalves, chief executive of Belvoir Group PLC, says the company’s franchisees will be ready to go straight out and start letting again as soon as the lockdown is lifted. Belvoir is actively transacting business on all sides except estate agency, where transactions have all but...

1 hour, 8 minutes ago

2 min read