EADS "neutral," target price reduced

04.10.06 - J.P. Morgan Securities

LONDON, October 4 (newratings.com) - Analysts at JP Morgan maintain their "neutral" rating on EADS (EAD), while reducing their estimates for the company. The 12-month target price has been reduced from ?22 to ?18.

In a research note published this morning, the analysts mention that the company is expected to report A380-related EBIT shortfall of ?2.8 billion going forward and an estimated cash outflow of ?6.3 billion for FY10. The downward revision in the target price reflects revised A380 costs and set-up expenses associated with the company's new savings plan, the analysts add. The EPS estimates for FY06 and FY07 have been reduced from ?1.07 to ?0.00 and from ?2.40 to ?1.60 respectively.