Broker snap: Investec downgrades BAE to hold

12th Oct 2011 09:35

Investec has downgraded UK defence contractor BAE Systems from buy to hold, saying that while third quarter trading was in line, uncertainties have persisted as expected.The firm said Wednesday that earnings for 2011 will be broadly in line with those in 2010, but warned that constraints on government expenditure are affecting many of its key markets, particularly in the US.The broker says that a lot of bad news is already price in, with the trading on a 6.6 times forward earnings. "But with potentially (positive and negative) price-moving events coming up we move to a neutral stance," given that the shares have moved close to its 300p target price. By 09:29, shares were trading 0.39% lower at 280p.BC