Goldman Sachs Upgrades L-3 Communications (LLL) to Neutral; Backlog Growth; Engility Spin A Near-Term Catalyst

Goldman Sachs upgraded L-3 Communications (NYSE: LLL) from Sell to Neutral. PT raised from $71 to $74.

Analyst, Noah Poponak, said, "Over the last almost three years, we had been quite negative on the Defense sector and thought Defense spending and earnings outcomes would surprise negatively, and we believed LLL was relatively poorly positioned given its end market exposures...We now think the market has a much better understanding of the likely outcome for Defense spending, and therefore end-market exposures and top-line weakness are likely to be less of a relative surprise."

"LLL has the strongest FCF/NI conversion and highest FCF yield in the group, its backlog mix is shifting towards its highest margin segments, and it has the June Engility spin catalyst that has arguably fallen off investor radar screens."

For an analyst ratings summary and ratings history on L-3 Communications click here. For more ratings news on L-3 Communications click here.

Shares of L-3 Communications closed at $67.98 yesterday.

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