Jefferies Maintains a 'Buy' on DigitalGlobe (DGI); The Pen is Mightier than the Sequester
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Price: $34.40 --0%
Rating Summary:
2 Buy, 6 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 3 | New: 2
Rating Summary:
2 Buy, 6 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 3 | New: 2
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Jefferies maintains a 'Buy' on DigitalGlobe (NYSE: DGI) price target of $30.00.
Jefferies analyst said, "A letter written by a bipartisan group of twelve US Congressmen and Senators to Defense Secretary Panetta and Director of National Intelligence Clapper defending the EnhancedView program from cuts was released after the closing bell on Nov 28. Shares of DGI reacted by closing down over 7% on Nov 29. We believe this was an overreaction, and DGI is well-positioned to generate positive cash flow in the near-term."
"DGI has already invested several hundred millions of dollars in WorldView-3, scheduled to launch in 2014, and in ground infrastructure of which it is building the final three of 11 ground stations. By September 2012, when the next annual option on the SLA contract must be authorized, nearly 2/3 of the $650 million WorldView-3 satellite should be built. We estimate DGI has about $280 million in pro forma cash and cash equivalents after the recent debt financing. With an additional $100 million revolver, DGI has more than sufficient liquidity to complete the satellite construction with internal and available external financing. The core business is cash flow positive after the capex peak which is expected in the first half of 2012."
For an analyst ratings summary and ratings history on DigitalGlobe click here. For more ratings news on DigitalGlobe click here.
Shares of DigitalGlobe closed at $14.90 yesterday.
Jefferies analyst said, "A letter written by a bipartisan group of twelve US Congressmen and Senators to Defense Secretary Panetta and Director of National Intelligence Clapper defending the EnhancedView program from cuts was released after the closing bell on Nov 28. Shares of DGI reacted by closing down over 7% on Nov 29. We believe this was an overreaction, and DGI is well-positioned to generate positive cash flow in the near-term."
"DGI has already invested several hundred millions of dollars in WorldView-3, scheduled to launch in 2014, and in ground infrastructure of which it is building the final three of 11 ground stations. By September 2012, when the next annual option on the SLA contract must be authorized, nearly 2/3 of the $650 million WorldView-3 satellite should be built. We estimate DGI has about $280 million in pro forma cash and cash equivalents after the recent debt financing. With an additional $100 million revolver, DGI has more than sufficient liquidity to complete the satellite construction with internal and available external financing. The core business is cash flow positive after the capex peak which is expected in the first half of 2012."
For an analyst ratings summary and ratings history on DigitalGlobe click here. For more ratings news on DigitalGlobe click here.
Shares of DigitalGlobe closed at $14.90 yesterday.
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