Broker snap: BAE to feel the pinch, says Goldman

8th Jun 2009 12:46

Goldman Sachs has been reviewing the aerospace and defence sector and foresees a tough time from 2011 onwards for companies with a large exposure to the UK and US defence markets, on expectations of a reduction in military operations in Iraq and Afghanistan.The broker said that 2011 should mark the nadir of the new aircraft delivery cycle, adding: 'On a three-year view we thus see civil aerospace as significantly more attractive than defence.' Goldman Sachs has downgraded defence stocks BAE Systems and Cobham from 'neutral' to 'sell' with the former seeing its price target cut to 330p from 400p.In contrast it has upgraded aero engine giant Rolls-Royce from 'sell' to 'neutral' and aerospace equipment and defence systems provider Meggitt from 'neutral' to 'buy'.