Deutsche Bank Sees Double-Digit EPS Growth at Orbital-ATK (OA) and Initiates Coverage at 'Buy'
- Top 10 News for 10/17 - 10/21: Merger Rumors Abound; CEOs Depart; Tesla Kicks Autopilot Up A Notch
- Wall Street ends little changed; Microsoft hits record
- AT&T (T) in Advanced Talks to Acquire Time Warner (TWX) - DJ
- Rockwell Automation (ROK) Said to Attract Takeover Interest from Schneider Electric - Source
- British American Tobacco Offers to Acquire Remaining Shares of Reynolds American (RAI) for $56.50/Share
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
Deutsche Bank initiated coverage on Orbital-ATK (NYSE: OA) with a Buy rating and a price target of $100. Analyst Myles Walton said the stock was compelling following a recent pullback, and he anticipates 3-4% sales CAGR though 2020 and double-digit EPS growth.
"We see the stock as compelling at current levels following its most recent pullback and expect that following a release of the company's audited financial statements in the next month coupled with a successful resupply mission (and Antares return-to-flight), incremental buying will pick-up in the name," said Walton. "OA's proprietary product portfolio in the defense and space market as the result of a powerful combination of Orbital Sciences and ATK in early 2015 should provide a foundation for DD EPS growth through the end of the decade."
The analyst added, "US defense spending is starting to tick up after 7yrs of declining budgets and with 50% exposure to the US security spending, OA is in a prime position to benefit from a multi-year expansion. Similarly, the company’s 25% exposure to NASA will be an asset as that agency’s budget was also caught in the spending downdraft (but now showing 2-4% growth). The company also has 3 growth initiatives aimed at delivering a 10% boost to the top-line run-rate by 2020, which make us comfortable in a 3-4% sales CAGR though 2020, which combined with margin expansion and $150M/yr in repo get us to a DD EPS growth (with further balance sheet optionality still in the model)."
Shares of Orbital-ATK closed at $75.43 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Stifel Starts Xenon Pharmaceuticals (XENE) at Buy
- Jefferies Cuts Price Target on Boston Beer Co. (SAM) to $140 Following Weak 3Q
- Jefferies Cuts Price Target on Packaging Corp. (PKG) to $93; Reiterates Buy
Create E-mail Alert Related CategoriesAnalyst Comments, Hot Comments, Hot New Coverage, New Coverage
Related EntitiesDeutsche Bank
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!