Broker snap: Buy BAE after sell-off, JPM says

24th Jun 2008 10:10

JP Morgan has reiterated its 'overweight' rating on BAE Systems after the defence giant's share price fell heavily amid concerns about an investigation by the US Department of Justice (DoJ).The DoJ is investigating an arms deal between BAE and Saudi Arabia. Shares in the company have come off highs of above 500p earlier this year, with some investors concerned that the probe will hit BAE's performance."We are reiterating our overweight rating on BAE Systems following what we view as their recent indiscriminate sell-off," JPM said.JPM also noted that concerns have arisen over the possibility of UK defence cuts.Speaking about BAE shares' poor year to date it said: "This follows negative newsflow (but not new risk) on UK defence cuts (which we believe reflect posturing by parties involved, and not new news for BAE) and the DoJ investigation."The broker trims its price target on BAE to 520p from 550p.