Broker tips: Rolls-Royce, GKN, Thorntons

Investec has trimmed its target for Rolls-Royce from 900p to 860p and kept its ‘hold’ rating, saying that a faster decline in Trent 700 production “increases headwinds” for the engine maker.
“The Trent 700, that powers the A330ceo, is currently Rolls’ most significant in production engine. We reduce our forecasts for Trent 700 deliveries to reflect reduced A330 production forecasts from 2015 following disappointing order intake and Airbus’ investor forum,” Investec said.

Struggles in GKN‘s Land Systems (LS) division are providing a drag on investor confidence about the engineering firm, though broker Numis Securities still reiterated its ‘add’ stance on the stock.

The broker said that LS is the most cyclical and therefore lowest-value part of GKN and “should not undermine the value being created elsewhere”. The underlying performances of the auto and aerospace divisions are still improving despite softness in the defence market.

Thorntons‘ valuation is set to get a little more expensive after a profit warning from the chocolatier on Tuesday, according to Northland Capital Partners.

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