British aircraft parts supplier Meggitt rises to outperform meagregains on the UK's benchmark FTSE 100 index, which traders attribute toan upgrade on the company from investment bank UBS.
UBS raises its rating on Meggitt to "buy" from "neutral", helping Meggitt'sshares rise by 1.3 percent to 475.60 pence in early session trading, makingMeggitt one of the best-performing FTSE 100 stocks in percentage terms.
Trading volumes in Meggitt come in at around 20 percent of the stock's3-month average daily volume - above those for the FTSE where volumes only standat around 8 percent of the index's 3-month daily average.
UBS lowers its 12-month price target for Meggitt's shares to 520 pence from530 pence, arguing the company could be impacted by exchange rate movements,which in turn leads UBS to lower its 2014 earnings per share (EPS) forecast onMeggitt by 1.1 percent to 38.40 pence.
However, UBS adds that Meggitt's recent share price fall - with the stockdown by roughly 10 percent since the start of 2014 - has been overdone.
"We believe that Meggitt can sustain around 6 percent long term profitgrowth, driven mainly by the commercial aftermarket - largely planes that havealready been sold - and the high growth energy sector, where Meggitt'sproprietary technology gives them a performance advantage," UBS analyst CharlesArmitage writes in a research note.
Earlier this month, Meggitt said it was on course to meet its guidance forthe year after ironing out production problems in the United States, and it alsolifted its dividend as a sign of confidence in future growth.
Reuters messaging rm://sudip.kargupta.thomsonreuters.com@reuters.net
