UBS downgrades Meggitt after recent run

27th Jun 2014 09:55

UBS has downgraded its rating for aerospace engineer Meggitt from 'buy' to 'neutral' and lowered its target price from 520p to 505p on the back of worsening currency movements."As sterling has continued to strengthen, we have revised our assumptions and have downgraded our 2014 sales, [operating profits] and earnings per share forecasts by 3.4% due to translation of US$ sales back into sterling, plus a further 1.5% reduction from the Sunbank disposal," the Swiss bank said. Profit forecasts for 2015 have been cut by a further 1% "as the hedges run out and Meggitt is hit by transaction headwinds".UBS said the stock has outperformed the FTSE 100 by 11% since reaching a low of 445p in March and is now trading just above its new target price of 505p.The stock was down 0.8% at 506p by 09:54 on Friday. The stock had dropped sharply at the start of the week after JPMorgan Cazenove cut its recommendation for the shares to 'underweight'.BC