Avio jumps on Lockheed Martin deal to expand solid rocket motor production

** Shares in Italy's Avio AVI.MI are up around 5% after the rocket maker signed a strategic cooperating agreement with Lockheed Martin LMT.N to expand solid rocket motor (SRM) production in the United States on Tuesday

** Kepler Cheuvreux says qualification phase for SRM is expected to start in Italy, followed by production at the new $500 million Avio plant in Virginia, US

** The broker sees the deal absorbing up to 50% of the new US plant capacity

** "This agreement is a milestone towards Avio's 2035 plan target, to which we are aligned," says Kepler, confirming 'hold' rating and TP of €30.5 ($34.2)

** The deal "considerably increases the visibility of the new business in the U.S.," says Equita brokerage

** Out of 6 analysts that cover Avio, 4 rate the stock "buy" and ​2 rate it "hold"

($1 = 0.8929 euros)