Janney Montgomery Scott Initiates Coverage on CRA International (CRAI) with a Neutral

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Janney Montgomery Scott initiates coverage on CRA International (Nasdaq: CRAI) with a Neutral. Price target $24.

Janney analyst says, "Although we believe in the long term prospects for the company, our short term outlook is muted. Discretionary spending on consulting services (33% of revenue) and litigation related work, particularly in the areas of securities litigation, accounting, and valuation (about 40% of revenue) remains weak. CRA's largest practice depends on mergers and acquisitions (M&A) prospects (about 15% of revenue). The practice has performed better than the company's other services on a comparative basis, but posted lower year over year results."

"Our interest would increase with evidence of a general recovery in discretionary spending on consulting, a pick up in litigation work, and/or M&A activity. We will look for an increase in the company's utilization rates, as a sign things are improving. Utilization was below 70% in the most recent quarter...The primary catalyst for the stock is international competition and forensic work. Currently, CRA sees no competition for its competition/damages related consulting services in the Middle East. CRA has a first mover advantage in this area due to its strong relationships with the Saudi Arabian government...Our initial fiscal 2010 total revenue estimate is $310.6 million (5% growth from our fiscal 2009 estimate). Our 2010 non-GAAP earnings estimate is for $1.52, in line with consensus. Management does not provide guidance."

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CRA International, Inc. provides management, economic, and financial consulting services worldwide.