Broker snap: Too early to point the finger at Meggitt, says Jefferies

21st Jan 2013 10:53

Shares in aerospace engineer Meggitt were weighed down on Monday morning by concerns that one of the group's products could be linked to the grounding of Boeing 787 Dreamliners.However, analysts at Jefferies gave the company the benefit of the doubt, saying that it's too early to point fingers.Securaplane Technologies, a Meggitt subsidiary, does supply the B787 Battery Charger Unit (BCU), which is now the centre of investigation into the source of an electrical fire on a Boeing 787 last week. Nevertheless, Jefferies emphasised that nobody yet knows the cause.The broker said: "Fun as finger-pointing can be, the references to the fire at Securaplane over six years ago [from a Sunday Times article] and to fires in lap-top computers arguably simply prove to demonstrate that the challenges - risks if you prefer - of using lithium-ion battery technology have been known for years."[...] It is possible that Meggitt, as supplier of the B787 BCU, will be affected by some negative sentiment in the short term. We believe, however, that it would still be premature and quite possibly mistaken to identify lithium-ion battery technology as the villain of the piece."Jefferies has maintained a 'hold' rating and 365p target price for Meggitt.Shares were down 2.13% at 427.9p by 10:53 on Monday.BC