Rheinmetall upgraded to "buy"

16.03.07 - Deutsche Bank

LONDON, March 16 (newratings.com) - Analyst Bastian Synagowitz of Deutsche Bank upgrades Rheinmetall AG (RHM) from "hold" to "buy." The target price has been raised from ?54 to ?73.

In a research note published this morning, the analyst mentions that the successful restructuring of Air Defence, the growth of Rheinmetall's profitable international business and the possibility of winning many huge orders indicate that the prospects for the company are bright going ahead. Rheinmetall?s stock has underperformed that of its German Engineering peers by around 15% since November 2006, the analyst says. The estimated expansion of 208bps in the company?s margins until 2008 points towards potential EPS CAGR of 38.7% for 2006-2008, Deutsche Bank adds.