EADS downgraded to "underperform"

05.10.06 - Credit Suisse

LONDON, October 5 (newratings.com) - Analyst S East of Credit Suisse downgrades EADS (EAD) from "neutral" to "underperform," while reducing his estimates for the company. The target price has been reduced from ?24.0 to ?16.5.

In a research note published yesterday, the analyst mentions that the company has said that further A380 project delays would lead to ?2.8 billion in EBITA losses during 2006-2010. EADS has launched a new efficiency plan, "Power 8," which aims at annual savings of ?2.1 billion from 2010 and cash savings of ?5 billion during 2006-2010, the analyst says. The EPS estimates for 2006 and 2007 have been reduced from ?1.94 to ?1.06 and from 2.47 to ?1.23, respectively.