Cobham Share News (COB)

(ShareCast News) - Aerospace and defence firm Cobham got a boost on Wednesday as Barclays upgraded the stock to 'overweight' from 'equalweight' in light of the recent performance.It noted the stock has significantly de-rated since a small profit warning in the third quarter and lacklustre full year results, and is now trading at an increasingly attractive dividend yield."We think some investors discount the yield on fears that management may be required to cut the dividend in order to avoid breaching covenants due to the stretched balance sheet."But Barclays said the dividend cut was a low probability event."We calculate a 20% EBIT miss would be needed in 2016 to breach covenants and given over 80% of revenues are generated in stable or growing end markets, this seems unlikely. Moreover, after 45 years of paying a progressive dividend management is acutely aware of how a policy change would be received, in our view."Barclays added that given Cobham's earnings outlook, future dividend growth will likely be low to mid-single digits rather than the double-digit levels delivered historically.The bank cut its price target on the stock to 255p from 270p.At 1210 BST, Cobham shares were up 1.7% to 205.10p.