Stifel Cuts Price Target as Vectrus Inc (VEC) Loses Army Contract
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Stifel maintained a Hold rating on Vectrus Inc (NYSE: VEC), and cut the price target to $22.00 (from $30.00), following the Army's announcement that it did not select Vectrus on the recompete of its U.S. Army KBOSSS contract. The Army announced it awarded the KBOSSS 2.0 contract to a team of KBR and Triple Canopy. This contract to support the U.S. Army base in Kuwait represented 35% of Vectrus’ revenues in 1H16.
Analyst William Loomis commented, "After the close today, the Army announced it did not select Vectrus on the recompete of its largest contract, the U.S. Army KBOSSS contract, which was 35% of revenues in 1H16. While the company will likely protest the loss, we are taking the contract out of our estimates for next year. While our reduced target price of $22 is well below the closing price, we expect the stock to weaken tomorrow morning and are maintaining our Hold rating on the shares."
Shares of Vectrus Inc closed at $27.63 yesterday.
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