GKN is among the leading fallers following reports it is being put under pressure by Airbus, one of its major customers.
The aerospace and automotive group is down 4.7p at 362.2p on talk it has been told by Airbus to cut costs or lose key contracts. Liberum analysts said:
A Sunday Times article...highlights that Airbus is considering opening up its A320 contract (worth around £250m per year to GKN). Airbus reputedly wants GKN to cut costs by at least 10% and is considering all options. GKN’s Aerospace division (40% group earnings before interest and tax) may come under further pressure to meet current consensus of flat revenue growth in 2015.
We recently cut GKN from buy to hold given mounting concerns. In Aerospace, we pointed to the risks posed from falling A330 production and A350 delivery slippage. Cost pressure from Airbus adds further to our caution.
Meanwhile mining shares have slipped back after the disappointing Chinese trade data cast doubts on the country’s prospects of meeting its growth targets.
Anglo American is down 15p to 1000.5p, not helped by Exane BNP Paribas cutting its price target to 880p. Antofagasta has fallen 11.5p to 725.5p while Glencore is 4.5p lower at 272.9p.
But publishing group Pearson has put on 18p to £13.14 after analysts at Natixis rasied their target from £15 to £15.50, with a buy rating.
