As the market continues to come under pressure, the poor German industrial figures outweighing a surge in mining shares, BAE Systems has slipped lower after a downgrade.
The company's shares are down 6.1p at 455.5p after Cantor Fitzgerald moved from buy to hold. Analyst Andy Chambers said:
Despite increasing geopolitical risks and operational requirements, we feel that BAE is entering a period of relative calm in terms of newsflow and likely sentiment drivers. The recent third quarter interim management statement delivered another modest one-off impact to current year earnings, but conversely there has been positive contract news.
New issues with Typhoon have surfaced but may well be temporary. In the meantime the company continues with its solid cash performance with significant allocation to dividends and buyback, which we see as the main return for shareholders until underlying and sustainable organic growth is confirmed.
We thus retain a significant discount to our cash valuation and retain our target price at 460p, but downgrade our recommendation to hold.
Meanwhile AstraZeneca has fallen 72p to £42.93 despite Monday's news that its blood thinning drug Brilinta had won preferred status in the US. Panmure Gordon Savvas Neophytou said:
We acknowledge news of improved positioning of Brilinta in new treatment guidelines. This results in some 7.8% upgrade to our 2015 forecast. We upgrade the stock to buy (from hold) and set a new price target of £47.00 (from £44.00).
