Wells Fargo Downgrades Booz Allen Hamilton (BAH) to Market Perform; Slowing Revenue Growth & Pricing Pressure Create Headwind
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Price: $77.46 -0.45%
Rating Summary:
8 Buy, 13 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
8 Buy, 13 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo downgraded Booz Allen Hamilton (NYSE: BAH) from Outperform to Market Perform, price target range cut from $18-20 to $16-$18.
Wells analyst said, "We base this on: 1) BAH's recent loss of their ability to compete for new Air Force work out of their 800 person San Antonio office for the next three years; 2) The January 2012 reduction-in-force by ~2%, including higher level employees suggesting more limited near-term visibility to absorbing excess personnel capacity; 3) Anecdotal evidence suggesting intensifying pricing pressure, especially for re-competes and higher priced engagements, as well as initial pricing pressure in the growth market of cyber-security, a key focus area for BAH; and 4) our expectation that the Presidential election cycle will delay both the approval of GFY13 funding bills and the addressing of the onerous consequences of the Budget Control Act of 2011 (i.e. "sequestration") leading to sustained slow decision-making on awards and tight contract control by clients."
"Our FY13 pro forma EPS estimate goes to $1.60 from $1.74 and our FY14 pro forma EPS estimate to $1.68 from $1.85."
For an analyst ratings summary and ratings history on Booz Allen Hamilton click here. For more ratings news on Booz Allen Hamilton click here.
Shares of Booz Allen Hamilton closed at $17.52 yesterday.
Wells analyst said, "We base this on: 1) BAH's recent loss of their ability to compete for new Air Force work out of their 800 person San Antonio office for the next three years; 2) The January 2012 reduction-in-force by ~2%, including higher level employees suggesting more limited near-term visibility to absorbing excess personnel capacity; 3) Anecdotal evidence suggesting intensifying pricing pressure, especially for re-competes and higher priced engagements, as well as initial pricing pressure in the growth market of cyber-security, a key focus area for BAH; and 4) our expectation that the Presidential election cycle will delay both the approval of GFY13 funding bills and the addressing of the onerous consequences of the Budget Control Act of 2011 (i.e. "sequestration") leading to sustained slow decision-making on awards and tight contract control by clients."
"Our FY13 pro forma EPS estimate goes to $1.60 from $1.74 and our FY14 pro forma EPS estimate to $1.68 from $1.85."
For an analyst ratings summary and ratings history on Booz Allen Hamilton click here. For more ratings news on Booz Allen Hamilton click here.
Shares of Booz Allen Hamilton closed at $17.52 yesterday.
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