Analyst Note| Joachim Kotze, CFA |
Wide-moat Meggitt’s first-half 2022 revenue grew organically by 11%, driven by a strong recovery in civil markets in the second half, offset by soft defense sales. Group EBIT of GBP 79 million increased slightly more than revenue, driving margins up to 9.6%, from 9.1% in the previous year. Supply chain disruptions continue to weigh on the group's prospects. The firm abstained from providing any guidance since it is under an all-cash takeover offer from Parker Hannifin for GBX 800 per share, which also forms the basis of our GBX 800 fair value estimate as we believe the deal is highly likely to succeed. The deal is expected to close in the third quarter of 2022.