Deutsche Bank Downgrades LMI Aerospace (LMIA) to Hold; Valuation Call

Deutsche Bank downgraded LMI Aerospace (NASDAQ: LMIA) from Buy to Hold. PT raised from $24 to $26.

Deutsche analyst says, "We have long argued that LMIA's valuation discount to its commercial aerospace peers was too severe given the growth prospects for the company's end markets, with 70% exposure to commercial aerospace markets. To that point shares are up 53% YTD (vs. +5% for the S&P) and the company's valuation has been re‐rated from 10.3x fwd EPS when we initiated coverage in mid‐2010 to 12.8x currently, with shares now trading more in‐line with the commercial aerospace average of 13.2x...While we continue to expect hither Boeing production and Gulfstream largecabin shipments to drive 20%+ earnings growth and strong cash generation for LMIA this year and beyond, the risk‐reward at current levels is much more balanced in our view. Given LMIA's recent record of execution (beats last two Qs) we believe a smaller valuation discount to the group is justified, which we believe is reflected in the current stock price."

For more ratings news on LMI Aerospace click here and for the rating history of LMI Aerospace click here.

Shares of LMI Aerospace closed at $24.41 yesterday.

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