Jefferies Starts Science Applications (SAIC) at Buy

Jefferies initiates coverage on Science Applications (NYSE: SAIC) with a Buy rating and a price target of $57.00.

Analyst Amit Singh cited: "1) Decent top-line execution (better than the majority of peers, we believe) since the spin-off from LDOS on 9/27/13, 2) F16 revenue growth ests are achievable and could be modestly beat, 3) Beyond F16, we expect SAIC to deliver y/y annual organic top-line growth (overall modestly improving end-market, improving revs growth trend for Scitor, etc.), 4) Scitor acquisition added exposure to the higher growth intelligence market, 5) SAIC has relatively low in-theater (OCO) exposure, 6) While EBITDA margins are currently lower than most of the peers, we expect margin improvement in the near/mid-term, and 7) Solid free cash flow generation profile and well-balanced capital deployment strategy; NOL’s related to Scitor acquisition to boost cash generation."

For an analyst ratings summary and ratings history on Science Applications click here. For more ratings news on Science Applications click here.

Shares of Science Applications closed at $42.83 yesterday.

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