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A FTSE-100 company with a narrow bid-offer spread. Manufactures and supplies components and vehicle
structures to automotive, aerospace, mining and agricultural industries. Approximately 39,000 people work
in GKN companies and joint ventures in more than 30 countries

GKN corporate website - GKN investors website - Company history


(previous thread title no longer relevant, hence new thread)

Broker Update

2013 GKN PLC GKN Cantor Fitzgerald Buy 370.70 370.70 - 420.00 Retains

SP Target 420p.

GKN solid update this morning. Organic growth 6% ahead.

Expect broker upgrades on that.

Jefferies has kept its 'buy' rating for engineering giant GKN after the company's well-received quarterly results on Tuesday.

The broker said that in a seasonally weak third quarter, results have come in ahead of its expectations: "Apart from Land Systems, where there was an 8% organic decline in sales (1H13, -8%), everything else did pretty much what one might reasonably have expected against a trading backdrop somewhat stronger than that in 1H13, in our view."

Third-quarter sales rose to £1,865m to £1,608m the year before, ahead of Jefferies' forecast for £1,825m. Meanwhile, trading profits rose from £114m to £152m, compared with the £145m estimate.

The broker said: "We have dithered about revising our price target for GKN. Setting a price target appears to require us to formulate stances on both the micro and the macro backdrops. For now, all we would venture is that GKN's 3Q13 performance appears to be a step forward on the micro-front."

The stock was 2.21% higher at 370.5p by mid-morning on Tuesday.

Broker Updates on GKN

25 Oct 2013 GKN PLC GKN Cantor Fitzgerald Buy 373.30 376.20 420.00 430.00 Retains

25 Oct 2013 GKN PLC GKN Credit Suisse Outperform 373.30 376.20 395.00 395.00 Reiterates

StockMarketWire.com
Barclays Capital has upgraded its recommendation on global engineering group GKN (LON:GKN) to 'overweight' from 'equal weight', stating that the "stars appear to aligning" but admitted that the diversified nature of its operations make it difficult to pinpoint what is driving earnings.

The broker said: "Valuing the business is tricky, it's not quite an auto stock (although it sits in the SXAP) nor is it an A&D stock and increasingly it seems the right peers are other UK industrials. "On that basis it looks inexpensive."
Analysts have set a price target of 440 pence a share.

Separately, Liberum Capital initiated coverage of GKN with a 'buy' rating and 440 pence target in a note to investors, on Wednesday.

"GKN is cheap, has a strong balance sheet and can surprise on growth for two reasons; Driveline momentum, particularly in China, and acquisitions, which could be 11% accretive," the broker said.
"Investment in new technologies may be the icing."

"stars appear to aligning" - a well known investment ideology!?

In today at 332 ..

Out on Friday 334 . £9 profit . Wish all my trades were this good !!

StockMarketWire.com
RBC Capital Markets has downgraded its recommendation on multinational automotive and aerospace components group GKN (LON:GKN) to 'underperform' from 'sector perform' in its Pan European Industrial Goods note, today.

The broker highlighted that the shares have re-rated since October and that it sees few signs of earnings momentum improving.

"We believe that the recent re-rating reflects higher valuation multiples elsewhere (automotive peers) more than belief that margins can increase to closer to peers and/or that GKN is morphing into an aerospace company," analysts added.

Target price was cut to 340 pence a share from 390 pence.

Citigroup reiterates buy on GKN, target raised from 390p to 420p.

This could be a buy for me at some point if it drops somewhere near last years low .

Results interim 28/7/15

StockMarketWire.com
GKN reports a solid performance for six months to the end of June and announced it has agreed to acquire Fokker Technologies Group for €706m.

GKN also plans a non pre-emptive cash placing of new ordinary shares to raise approximately £200m, gross.

The group said GKN Driveline delivered 4% organic sales growth and an 8.3% trading margin while GKN Powder Metallurgy achieved an 11.8% margin.

GKN Aerospace delivered in line with expectations and won some important new contracts for the future.

Chief executive Nigel Stein said: "We have continued to perform well against our key markets and report good results in spite of some end market weakness, particularly in GKN Land Systems. We expect these trends to continue in the second half and for 2015 to be another year of growth.

"The acquisition of Fokker Technologies, also announced today, supports our strategy, brings excellent technology, an expanded geographic footprint and additional content on high growth aerospace programmes."

Highlights:
· Sales increased 1% organically

· Trading margin improved to 9.0%

· Profit before tax (management basis) up 4% at £346m

· Reported profit before tax was £212 million (2014: £224 million)

· Earnings per share up 1%, impacted by an increased tax rate of 24% (2014: 22%)

· Interim dividend increased 4% to 2.9 pence per share

· Free cash flow of £21 million (2014: £19 million)

· Net debt of £708 million (31 December 2014: £624 million), reflecting normal seasonality

Jeffries note: BUY TP 415p
"Excluding provision releases in Aerospace and a pension service credit in Corporate, we estimate Group EBIT would have been around 4% below company-sourced consensus. The ability of sentiment to drive GKN’s valuation has recently been manifest. Today’s acquisition of Fokker Technologies for £499m and share placing of £200m may test the mood. We thought GKN might be battening down the hatches, but we have significant expansion.
1H15 results in brief. Group management sales rose from £3,828m to £3,853m (company-sourced consensus £3,860m; JEFe £3,877m) and Group management EBIT rose from £340m to £346m (consensus £337m; JEFe £345m). There were, however, £15m of provision releases in Aerospace. Group EPS rose slightly from 14.4p to 14.5p (JEFe 13.8p), despite the book tax rate rising from 20% to 24%. The interim dividend was increased from 2.8p to 2.9P (JEFe 2.9p). 1H15 free cash was £21m compared to £19m in 1H14, although the latter included a £54m repayment of a UK Government refundable advance. Net debt at end 1H15 was £708m versus £813m at end 1H14 and £624m at end FY14. The total deficit on Group post-employment obligation at end 1H15 was £1,533m versus £1,711m at end FY14 and £1,363m at end 1H14.
Good organic growth. 1H15 Group management sales rose by 1%, the performance across each division being: Aerospace 2% (1H14 and FY14 = 3%), Driveline 4% (1H14 = 11%; FY14 = 8%), Powder Metallurgy 1% (1H14 = 6%; FY14 = 5%) and Land Systems -8% (1H14 = -9%; FY14 = -10%). GKN states that 1H15 global light vehicle production rose by 0.9% meaning that Driveline continued to usefully outperform its end market. In Driveline, good organic growth was achieved in Europe, but North American sales were in-line with the market due to the weighting of US new car registrations towards the pick-up truck segment where GKN’s content is lower than on cars and SUVs (this was also the case in the May trading update). Driveline’s 1H15 operating margin of 8.3% showed a useful improvement over 8% in 1H14 and 8.1% for FY14. GKN notes that its 2H15 growth in China is expected to be above the market due to the strong order book and new programme launches. No mention is made of pricing pressure. In Powder Metallurgy, reported organic sales growth of 1% was reduced by around 1% by the negative of a direct pass through of lower raw material prices, but that might also have helped the operating margin rise to 11.8% from 11.3% in 1H14 and 11% for FY14. Nonetheless, Powder Metallurgy looks a little dull, in our view.
Fokker Technologies. Today’s acquisition has an EV of €706m (£499m). GKN states the acquisition will be earnings accretive in its first full year and that ROIC should exceed GKN’s cost of capital in 2017. In 2014, Fokker had sales of €758m, EBITDA of €76m and EBIT of €53. GKN has identified potential synergies of around €23m. GKN also notes that Fokker has historical tax losses that GKN expects to utilise. In 2014, around 20% of Fokker’s sales from business jets, a market that has recently generated some cautious commentary at several of GKN’s peers. In many respects, however, Fokker appears to be a good fit in terms of the major programmes it supplies. On the Airbus A350 family, for example, Fokker supplies the outboard wing flap. It also supplies Flaperons for the F-35 JSF. Fokker’s GLARE fuselage panel for the A380 is also an interesting technology that may have future applications, in our view.
Great circles. Today, GKN looks to have continued following the shortest path from A to B; growing away from its legacy liabilities and moving Aerospace further towards a world-leading position. Our snap reaction is that Fokker is a complementary business being acquired at a reasonable price. The snag is that sometimes one must revise one’s course to reflect the prevailing winds. Those winds are currently such that GKN may test the market’s mettle today."

Bought in last week see if we can get the same sort of bounce as last year .

Still looking grim Jimmy......support at.........hmmmmmmm.....240p?

StockMarketWire.com
Investec has downgraded its recommendation on global engineering group GKN (LON:GKN) to hold from buy, stating that is adopting a more cautious view on the outlook for Driveline and Powder Met to reflect a potential slowdown in auto production in China and other emerging markets.

Analysts also reduced their target to 300 pence a share (from 370 pence), implying a forecast total return of 9.7 per cent.

The broker added: "Weak earnings momentum has shaken confidence and investors may require consensus forecasts to stabilise before buying into GKN's longer term potential to drive a re-rating."

I'm happy to hold for the moment HARRY ,doesn't seem as much of a gamble as some stocks out there .

One of the many suppliers to the auto industry hit by the VW news. Seems a bit unreasonable as GKN have nothing to do with the software side as far as I know, but may be an opportunity to buy into GKN when the dust as settled?

6 Oct Canaccord... 445.00 Buy
6 Oct Canaccord... N/A Buy
2 Oct Panmure Gordon 375.00 Buy
30 Sep JP Morgan... 380.00 Overweight