Orbital ATK (OA): Lifting The Returns - Jefferies
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Jefferies analyst, Howard Rubel, reiterated his Buy rating on shares of Orbital-ATK (NYSE: OA) and believes that management is using the Lake City contract SNAFU to raise the return on asset hurdle. The operational review of its contracting process should improve operating cash flow and should assist in strategic planning.
The analyst believes that management is well along in reviewing its other contracts and operating controls to determine if it has a systematic problem. This process evaluated all major contracts and examined a sampling of medium and smaller contracts. The effort should be concluded by the end of August. It appears that there have been no other problems but it could then take about 45 days to file the second quarter 10-Q, which is a mid-October target.
EPS estimates remain unchanged as well as the price target of $100.
Shares of Orbital-ATK closed at $76.05 yesterday.
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