Berenberg lifts Avio to 'buy' on solid rocket motor shortage

** Berenberg upgrades Italian aerospace company Avio to "buy" from "hold," as the firm stands to benefit from a structural shortage in solid rocket motors (SRMs)

** The broker raises its PT by 18% to €39 ($43.77), citing a "missile bottleneck that continues to tighten," as conflicts widen the US and European propellant shortfall

** The brokerage notes major defence contractors want independent suppliers at scale, expecting firms like Lockheed Martin LMT.N and Raytheon to fill capacity at Avio's new US plant

** "Our channel checks indicate that these US customers have an ambition for Avio to represent a substantial share of their supply base," Berenberg adds

** The broker expects the addressable market for SRMs could reach up to $10 billion by 2030, thus raising its estimates for the group's revenues and core profit for 2030

** Out of six analysts that cover Avio, five rate the stock "strong buy" or "buy" and only ​one analyst maintains a "hold" rating - LSEG data

($1 = 0.8911 euros)