Meggitt (MGGT)

Business description

Meggitt is a global manufacturer of aerospace equipment, sensing and defence systems. Its end markets are Civil Aerospace (41%), Military (45%) and Energy & Other (14%).

Upside potential

QuickView | Aerospace & Defence | 03/06/2009

The issues are clear – debt, currency and civil aerospace. Management is working to offset the downside and smooth the effects. There are few listed exposures to the aerospace cycle in the UK and this has added to the volatility of the share price. Expectations are that the key metrics will remain stable through the current turmoil as management action and currency gains offset the poor fundamentals. Valuation remains low at 5.8x EV/EBITDA, less than 7x forward P/E and a well covered yield of 5.3% leaving scope for recovery as evidence of delivery builds.

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Stock data

Market cap.£2826.3m
Last close364.600p
High / Low (52 weeks)587.5p / 347.3p
Stock market listingLN, LN
Forecast net debt (£m)506
Forecast gearing ratio (%)N/A
TeamIndustrials
SectorAerospace & Defence

Price performance

%1m3m12m
Actual0.9(23.7)(29.8)
Relative *1.4(18.9)(25)

* % Relative to local index