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Needham & Company Downgrades Cubic (CUB) to Hold

November 26, 2014 7:23 AM EST
Get Alerts CUB Hot Sheet
Price: $75.00 --0%

Rating Summary:
    5 Buy, 7 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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Needham & Company downgraded Cubic (NYSE: CUB) from Buy to Hold saying 2015 looks like another transition year.

Analyst James Ricchiuti commented, "CUB ended FQ4 on a strong note, with results handily beating expectations. However, mgmt guided to disappointing F15 EPS and suggested a more back-end loaded year. CUB plans to ramp R&D related to its NextCity program, which mgmt. sees as an emerging driver in its Transportation business, and to expand its C4ISR products in the Defense business. CUB is also likely to incur higher expenses related to its One Cubic program, which longer term should provide significant cost savings. While we don’t disagree with these investments, we believe the benefits may not become apparent until F16. Absent better top-line growth prospects and given the tepid earnings guidance, we believe it will be challenging for CUB shares to move meaningfully higher in the near term."

The analyst is lowering F15 EPS estimate to $2.70 from $3.05 on revenue of $1.4B. They are introducing a F16 EPS estimate of $3.20 on revenue of $1.54B.

For an analyst ratings summary and ratings history on Cubic click here. For more ratings news on Cubic click here.

Shares of Cubic closed at $47.07 yesterday.



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