Kepler Cheuvreux cuts Exosens to 'reduce', shares fall

** Kepler Cheuvreux cuts French defence technology manufacturer Exosens' EXENS rating to "reduce" from "hold", citing limited sector growth potential, sending its shares down 6.9%

** "We can't defend the defence premium," the broker says, adding that the growth in the sector is "capped by capacity potential"

** Though Exosens' share price has benefited from positive fund flows chasing momentum, the broker says it far exceeds what investors should pay

** It expects Exosens to reaffirm high teens sales growth and low twenties EBITDA growth for the year during H1 results on July 30

** Kepler revises its adjusted EPS forecasts downward, forecasting an increase in its effective tax rate to approximately 25% over the next two to three years as tax loss carry-forwards begin to expire