NewsEADS "hold," target price reduced
05.10.06 - Deutsche Bank
LONDON, October 5 (newratings.com) - Analyst Ben Fidler of Deutsche Bank maintains his "hold" rating on EADS (EAD). The target price has been reduced from ?24.50 to ?19.50.
In a research note published this morning, the analyst mentions that the company?s net cash position is expected to deteriorate from ?5.25 billion by 1H06 to ?1.5 billion by 2008, in the wake of another 12-month delay in the A380 programme. The target price has been reduced to reflect the impact of this delay, the analyst says. EADS has announced a new cost saving initiative that aims at savings of ?2 billion annually and cumulative cash of ?5 billion by 2010. The analyst expresses his concerns, however, regarding the market?s reaction to this cost saving initiative, following the failure of the company?s previous programme in meeting the targets.