Slight improvement and Broker Upgrades to Buy from Hold, so hanging in to see what happens.
Pretty much confirms the reason for the recent downturn, maybe they should use the US revenue to fund foreign acquisition to diversify their cost base! Hopefuly the results on Tuesday look good! Engineering giants Rolls Royce and GKN hit by strong pound By Alan Tovey | Telegraph – 15 hours ago Britain's biggest industrial and engineering firms are likely to be revealed as struggling in the face of a strong pound when they report first-half results this week The impact the strengthening pound is having on some of the UK’s biggest companies will be revealed this week when industrial and engineering heavyweights report first-half results. In the past year the pound has gained in value by 10pc against the US dollar and euro, meaning sales booked abroad and translated into sterling will have a lower impact. Foreign sales conducted in pounds are also getting harder to come by as they have effectively pushed up prices by a similar amount. Kicking off is GKN (LSE: GKN.L - news) , the supplier of drive trains for the auto industry and parts for aircraft, which will deliver its results on Tuesday. “Car sales in Europe are still weak but strong in China and the US, though the comparatives are getting harder,” said Brewin Dolphin (LSE: BRW.L - news) analyst Nicla Di Palma. “However, the big car makers won’t let GKN’s margins get any bigger.” She said the civil aerospace market is likely to remain strong for the next 18 to 24 months, and added that recent events in Ukraine could cause governments to “rethink future [defence] cuts”. Two days later, analysts will be reaching for the paracetamol as Rolls-Royce, BAE Systems (LSE: BA.L - news) and Weir report simultaneously. Derby-based engine maker Rolls could face the heaviest scrutiny. In March it admitted that it was facing a US Department of Justice investigation into allegations of bribery in Indonesia, on top of a longer-running Serious Fraud Office inquiry into similar claims. However, one City source said this was the “reality of doing business in developing markets”, which serious investors understood. In a note, Investec (LSE: INVP.L - news) analyst Rami Myerson warned to “expect volatility… as investors factor in Rolls’ strategy to become a diversified industrial rather than a pure-play aero engine company”. BAE will be under pressure, as US rivals such as Lockheed Martin have recently reported strong results that could make the world’s second-largest defence business seem underperforming. However, the agreement on the pricing of sales of Typhoon jets to Saudi Arabia has given the business some stability. Look out for further comment on Scotland as analysts say BAE would be the worst hit should the Union dissolve. Industrial pump-maker Weir has been the strongest performing industrial in the year to date. However, Deutsche analysts warn that it is “not all plain sailing&
I regret that I have no idea whatsoever. I suspect that the Russian scene does not help as I think GKN have some sort of plant there focussed on agricultural machinery. The strong pound clearly does not help. GKN should be doing better and recently won a large contract from Bombardier in Canada.for parts for trains. Brokers say buy but targets are being reduced and the shares diminish in value. The drop must stop somehwere but where? Perhaps they will be taken over by some richer company from abroad - who knows? I am holding but don't like seeing the value of my shares sinkl and sink and sink....
23 Jul '14
fwiw i agree....report 29th i believe.
21 Jul '14
GKN is a strange one, its heavily influenced by the automotive and aerospace industry which is booming but the SP isnt doing much. One factor could be the strength of Sterling and someone from GKN said they were looking into aquisitions when quizzed recently. Hopefully a trading update/results will provide a boost. Does anyone know when this will be? It could be a good buying opportunity at this price. Any opinions Barlew?
9 Jul '14
SP dropping still
Down another 25p since my last post. Does anybody know why particularly when the brokers keep recommending the share with "buy"
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