Broker snap: Jefferies has some reservations about Meggitt's outlook

6th Mar 2012 17:31

Jefferies has maintained its hold recommendation and 300p target price for aerospace, defence and energy engineer Meggitt, saying that it has 'just a reservation or two' following the company's full-year results.Revenue in 2011 rose by a quarter to £1,455.3m from £1,162.0m in 2010, and roughly in line with market expectations of £1,458.7m. The company said it continues to expect organic revenue growth of 6 to 7% on average over the next five years. "Last November's IMS provided quite specific guidance for the 2011 result. That guidance has been met. The guidance for 2012 is essentially unchanged. In short, the 2011 result looks fine, but we harbour some reservations about the long-term outlook," Jefferies said.In particular, the US broker says that despite an encouraging second half for Military, growth many not be able to be sustained as the USA retires some aircraft and reduces its operational tempo.The stock was one of the worst performers on the FTSE 100 on Tuesday, finishing the day down 4.92% at 380.5p. This compares with last night's closing price of 400.2p, the current 52-week high.BC