Meggitt rallies as JP Morgan upgrades stock to 'neutral'

9th Aug 2016 10:22

(ShareCast News) - Meggitt shares gained on Tuesday as JP Morgan upgraded the aerospace engineer to 'neutral' from 'underweight' and raised its target price to 445p from 395p.The upgrade came shortly after news that activist investor Elliott Capital Advisors bought a 5.2% stake in the business which last week reported a plunge in pre-tax profits amid a challenging market."We upgrade the stock to 'neutral' and increase our multiples-based December 2016 price target to 445p from 395p, reflecting the higher possibility of either: (1) internal changes in Meggitt's strategy; or (2) merger & acquisition activity," JP Morgan said.JP Morgan believes the share price will recover from its slump following the announcement of the investment. The share price plunged 40% in October when Meggitt issued a profit warning.Shares rose 2.40% to 461.70p at 1042 BST.