Charles Stanley upgrades Meggitt, says valuation looks "more realistic"
Charles Stanley upgraded Meggitt to ‘accumulate’ from ‘hold’, citing recent share price weakness.
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Meggitt
798.80p
16:52 12/09/22
“Following share price underperformance year-to-date, the valuation looks more realistic and Meggitt offers an above sector average dividend yield supported by improving free cash flow,” analysts said in a note on Tuesday.
The brokerage noted that Meggitt’s share price was down 8.2% over the last year, having lost 12.3% in the last three months.
Analysts said the company’s first-half results were slightly ahead of expectations and organic sales growth of 3% reflect good growth in the civil aerospace division and a better-than-expected performance in its military arm, partially offset by ongoing challenges in the energy market.
“Reassuringly, Meggitt remains on course to achieve low to mid-single digit organic sales growth in 2015,” said Charles Stanley.
It said that although Meggitt continues to face near-term headwinds, investors are likely to be relieved that the group remains on track to deliver full-year guidance, underpinned by the benefits of self-help initiatives, a supportive share buyback programme and early signs of a stabilisation in defence budgets.
At 1431 BST, Meggitt shares were up 5.9% at 491.50p.