Barclays Maintains an 'Overweight' on Harris Corp (HRS); GMR Cancellation Presents an Opportunity
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Price: $189.13 --0%
Rating Summary:
13 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
Rating Summary:
13 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
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Barclays maintains an 'Overweight' on Harris Corp. (NYSE: HRS) price target of $51.00.
Barclays analyst says, "Yesterday InsideDefense stated that according to Army officials, the Army plans to cancel the Joint Tactical Radio Systems' Ground Mobile Radio (GMR) in favor of an alternative solution. The cancellation of the GMR is not necessarily a surprise given prior Army commentary following the GMR's Nunn-McCurdy breach in May (unit costs increased more than 50% following a reduction in the planned order quantity)...Although the article does not provide much additional clarity around the final outcome for the alternative to the GMR program, it does point out that, "meanwhile, the Army will procure approximately eight brigades' worth of Harris 117G radios." In our view, while the ultimate size and timing of this potential buy of HRS 117G radios remains unclear, this "bridge solution" has the potential to be meaningful and may serve as a notable positive for HRS shares; we think some benefit from the GMR cancellation was anticipated by the market, although expected size and probabilitity were likely small."
"Additionally, given tightening budgetary conditions, the probability of temporary "bridge solutions" being fully implemented over the longer term is much higher than normal and should be noted, in our view."
For more ratings news on Harris Corp. click here and for the rating history of Harris Corp. click here.
Shares of Harris Corp. closed at $36.16 yesterday.
Barclays analyst says, "Yesterday InsideDefense stated that according to Army officials, the Army plans to cancel the Joint Tactical Radio Systems' Ground Mobile Radio (GMR) in favor of an alternative solution. The cancellation of the GMR is not necessarily a surprise given prior Army commentary following the GMR's Nunn-McCurdy breach in May (unit costs increased more than 50% following a reduction in the planned order quantity)...Although the article does not provide much additional clarity around the final outcome for the alternative to the GMR program, it does point out that, "meanwhile, the Army will procure approximately eight brigades' worth of Harris 117G radios." In our view, while the ultimate size and timing of this potential buy of HRS 117G radios remains unclear, this "bridge solution" has the potential to be meaningful and may serve as a notable positive for HRS shares; we think some benefit from the GMR cancellation was anticipated by the market, although expected size and probabilitity were likely small."
"Additionally, given tightening budgetary conditions, the probability of temporary "bridge solutions" being fully implemented over the longer term is much higher than normal and should be noted, in our view."
For more ratings news on Harris Corp. click here and for the rating history of Harris Corp. click here.
Shares of Harris Corp. closed at $36.16 yesterday.
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