Ultra Electronics downgraded by Berenberg

Berenberg Bank has revisited the aerospace and defence sector following earnings season and concluded that financial results and outlook statements were generally reassuring across the board, especially considering political changes such Brexit and the US election, which have brought defence spending into the spotlight, along with the various challenges faced within the civil aerospace industry.

The bank maintained its recommendations for all stocks covered with one exception, Ultra Electronics (LON:ULE), which was downgraded to hold (from buy) on valuation grounds.

“Any uptick in overall defence spending, especially in the US (52% of sales), presents upside to Ultra’s growth profile over the longer term,” analysts said.

“However, after a positive reaction post-results, and with the shares having rallied by 30% over six months, we now see insufficient upside to our raised price target of 2,250p, and hence move to a Hold rating.”

Berenberg maintained buy ratings on BAE Systems (LON:BA.), GKN (LON:GKN) and Senior (LON:SNR), while Cobham (LON:COB), Meggit (LON:MGGT) and Rolls Royce (LON:RR.) continue to be rated as hold.

Target prices were raised across the board.

At 3:02pm:

(LON:COB) Cobham PLC share price was +1.05p at 135.05p

(LON:GKN) GKN PLC share price was -1.1p at 371.2p

(LON:RR.) RollsRoyce Group PLC share price was +8.75p at 756.25p

(LON:SNR) Senior PLC share price was +0.2p at 196.9p

(LON:ULE) Ultra Electronics Holdings PLC share price was +15.5p at 2219.5p

Story provided by StockMarketWire.com

Merryn

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