Goldman Sachs Upgrades Aeroflex Holding (ARX) to Conviction Buy List, Sees 64% Upside

Goldman Sachs upgraded Aeroflex Holding (NYSE: ARX) to Conviction Buy with a price target of $15, suggesting 64% upside.

The firm notes the stock is down 44% YTD, versus a 9% move down in the SOX, after recent project push-outs and concerns about its large exposure to the defense market. However, they believes Teradynes (NYSE: TER) proposed acquisition of LitePoint - will refocus investors on this business at Aeroflex.

"Applying a LitePoint multiple to Aeroflex's test business (about half of total sales) would imply an equity value for test alone that is more than where the stock currently trades."

Goldman believes Teradyne's proposed acquisition of LitePoint and Danaher's purchase of Keithley in December 2010 will help to establish a floor valuation in ARX.

For more ratings news on Aeroflex Holding click here and for the rating history of Aeroflex Holding click here.

Shares of Aeroflex Holding closed at $9.28 yesterday.

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