Rheinmetall downgraded to "hold"

22.10.08 - LB Baden-Württemberg

LONDON, October 22 (newratings.com) - Analysts at LB Baden-Wurttemberg downgrade Rheinmetall (RHM) from "buy" to "hold," while reducing their estimates for the company. The target price has been reduced from ?39 to ?29.

In a research note published this morning, the analysts mention that the company is likely to miss its 2008 earnings target due to further deterioration in the automotive business. Rheinmetall is now expected to post 2008 EBIT of ?278 million, as compared to the company?s guidance of ?280million-?290 million, the analysts add. The company is also unlikely to achieve its EBIT group margin target of 9% by 2010, LB Baden-Wurttemberg says. The EPS estimates for F2008 and F2009 have been reduced from ?4.78 to ?4.57 and from ?5.49 to ?4.82, respectively.