Investec downgrades Meggitt after "rough landing" in H1

6th Aug 2014 10:11

Investec has downgraded its rating for aerospace engineer Meggitt from 'add' to 'hold' and slashed its target price from 530p to 480p "following a rough landing in the first half".Lower military sales, the deferral of revenues at heat-exchanger business Heatric and a larger currency headwind have prompted Investec to cut its revenue forecasts for 2014-2016 by around 3%. However, operating profit predictions have been slashed by 7-9% with margins estimates also reduced."Meggitt's disappointing first half has likely shaken investor confidence (again). A number of Meggitt's end markets have stabilised or shown signs of growth, but these have not sufficiently boosted revenues or orders," Investec said."Bar a credible bid for the company, we cannot identify a catalyst that will drive an outperformance of the shares near term until greater certainty over 2014 is available."Meggitt was trading down 0.4% at 477.7p by 10:48.BC