Meggitt (MGGT)

Sector:

Defense and Aeronautics

Index:

FTSE 100

277.00p
   
  • Change Today:
    -18.00p
  • 52 Week High: 697.40
  • 52 Week Low: 217.00
  • Currency: UK Pounds
  • Shares Issued: 780.71m
  • Volume: 52,331,758
  • Market Cap: £2,162.55m
  • RiskGrade: 488

Morgan Stanley upgrades Meggitt in positive aerospace note

By Sean Farrell

Date: Tuesday 31 Mar 2020

LONDON (ShareCast) - (Sharecast News) - Morgan Stanley upgraded Meggitt to 'overweight' as the investment bank recommended buying shares in the aerospace sector.
Andrew Humphrey and his team at Morgan Stanley reduced short-term earnings forecasts for the sector but predicted a recovery in demand for flights once the Covid-19 crisis passes.

Humphrey cut earnings per share estimates on average by 40% in 2020 and 28% in 2021 for companies with mainly civil aerospace exposure. He cut his price target for Meggitt, the maker of brakes and other aerospace parts, to 382p from 570p but increased the company's rating to 'overweight' from 'equal weight'.

Morgan Stanley cut its price target for Rolls-Royce to 460p from 770p and also reduced its price target for Airbus to €86 from £150. The analysts cut Safran's price target to €79 from €145 and MTU Aero Engines' to €255 from €122.

Recent share-price falls incorrectly suggest permanently lower airline capital spending, smaller fleets, lower growth and more cyclical profits, he said. Instead there will be severe disruption in the second quarter followed by a gradual recovery into 2021, Humphrey said.

"We do not think consumers' long-term propensity to travel will change materially as a result of Covid-19," Humphrey wrote in a note to clients. "Our base case is that many will still be flying home for Thanksgiving or Christmas this year."

Air traffic, fleet sizes and profitability will return to pre-crisis levels in the long term and "the sector looks cheap on all but the most conservative multiples", he said.

Meggitt's share price has more than halved in 2020, reflecting concerns about its debt and that its aftermarket may be more vulnerable than rivals.

"We believe Meggitt's high and defensive military exposure may be underappreciated, and that exposure to business and regional jet aftermarket provides gearing into a faster recovery in domestic travel," Humphrey wrote. "Recent underperformance creates a tactical opportunity."





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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Meggitt Market Data

Currency UK Pounds
Share Price 277.00p
Change Today -18.00p
% Change -6.10 %
52 Week High 697.40
52 Week Low 217.00
Volume 52,331,758
Shares Issued 780.71m
Market Cap £2,162.55m
RiskGrade 488

Meggitt Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
6.78% above the market average6.78% above the market average6.78% above the market average6.78% above the market average6.78% above the market average
69.23% above the sector average69.23% above the sector average69.23% above the sector average69.23% above the sector average69.23% above the sector average
Price Trend
67.53% below the market average67.53% below the market average67.53% below the market average67.53% below the market average67.53% below the market average
53.85% below the sector average53.85% below the sector average53.85% below the sector average53.85% below the sector average53.85% below the sector average
Income
43.87% above the market average43.87% above the market average43.87% above the market average43.87% above the market average43.87% above the market average
80.00% above the sector average80.00% above the sector average80.00% above the sector average80.00% above the sector average80.00% above the sector average
Growth
6.22% above the market average6.22% above the market average6.22% above the market average6.22% above the market average6.22% above the market average
23.08% above the sector average23.08% above the sector average23.08% above the sector average23.08% above the sector average23.08% above the sector average

What The Brokers Say

Strong Buy 7
Buy 1
Neutral 8
Sell 0
Strong Sell 4
Total 20
neutral
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Meggitt Dividends

  Latest Previous
  Interim Final
Ex-Div 05-Sep-19 21-Mar-19
Paid 04-Oct-19 03-May-19
Amount 5.55p 11.35p

Trades for 29-May-2020

Time Volume / Share Price
16:35 45,460,450 @ 277.00p
16:29 38 @ 275.20p
16:29 147 @ 275.20p
16:29 324 @ 275.20p
16:29 210 @ 275.20p

Meggitt Key Personnel

CEO Tony Wood

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