Westhouse Securities reiterates 'sell' recommendation on BAE Systems

30th Sep 2014 16:52

Shares of aerospace engineer BAE Systems have run up by 12% relative to the Footsie over the past quarter, but it's time to sell, say analysts at Westhouse Securities.Thus, the firm can be expected to benefit from weakness in sterling. However, several negative aspects seen in recent reporting periods have been replaying themselves. Amongst these one might mention: a shipbuilding charge, slightly weak order intake, goodwill impairment and a potential disruption from the 'continuing resolution' (CR) in the US Congress.The latter of those issues may likely endure longer than 2014, the broker says, to which one can add management's caution.With only 19 voting days left for the house this year CR may well run into the next, Westhouse explains.Furthermore, the company's book-to-bill ratio of 0.75 times the broker's 2014 revenue estimate is "low", despite the fact that the average contract duration for the company is longer than for others.For all of the above reasons Westhouse Securities reiterated its sell recommendation and 469p target.