Analysts at Canaccord Genuity reinstated their forecasts and price target for infrastructure, aviation and energy company Esken on Tuesday, hitting the stock with a ‘buy’ rating but lowering their target price on the stock to 23.0p.
Canaccord said it thinks Esken’s shares were capable of supporting its price target over the next 12 months, and with over 60% upside, added that the stock offers a “compelling” reward/risk scenario.
The Canadian bank stated Esken’s outlook compounds for longer-term risk-takers, reflecting its long-term projections for the group and the London Airport market – which implies that the market value for London Southend Airport could, in time, be strongly ahead of the £400.0m its CGI convertible loan implies.
“We believe that with its refreshed management team, Esken is capable of continued stabilisation and transition to a focus on assets capable of generating better returns, cash flow and value – with energy and London Southend Airport (LSA) being key prospects,” said Canaccord, which previously had a 136.0p target price on the stock before placing it under review.
JPMorgan Cazenove downgraded Qinetiq and BAE Systems on Tuesday as it took a look at the European aerospace and defence sector.
The bank cut both BAE and Qinetiq to ‘underweight’ from ‘neutral’, noting they have a “meaningful” exposure to the US market – which it said is now in a slowdown – at around 45% and 17% respectively, but trade on higher multiples than EDS peers.
JPM said it expects 2022 to be a good year in terms of top line growth for European civil aerospace. However, companies will face cost headwinds as they ramp up production and navigate supply chain issues.
“Covid-19 is still very much a fact of life for aviation, so we prefer high quality companies with exposure to short-haul air travel,” it said.
JPM cut its price target on Qinetiq to 260.0p from 320.0p and on BAE to 555.0p from 645.0p.