Needham & Company Downgrades Teledyne (TDY) to Hold

Needham & Company downgraded Teledyne (NYSE: TDY) from Buy to Hold noting the outlook in instrumentation weakens.

Analyst James Ricchiuti commented, "We are lowering our rating on TDY to Hold from Buy following yesterday's Q3 preannouncement, the result primarily of a weakening outlook in the company's instrumentation business, which represents nearly half its revs. Mgmt, consistent with its practice of providing EPS guidance only, said Q3 EPS would be 9-11% below consensus and the midpoint of its prior guidance. Its revised 2015 EPS guidance implies that Q4 EPS will also be below Street expectations. Mgmt is implementing cost reductions, which should partially mitigate the impact on margins. However, we believe challenges in parts of TDY's commercial business are likely to persist into 2016. TDY shares, which pulled back modestly on the preannouncement and are now down about 20% from recent highs set in mid-July, appear fairly valued at current levels."

The firm is lowering Q3 EPS estimate to $1.31 on revenues of $562.5M, compared with prior estimate of $1.45 and $589M, respectively. They are lowering full-year EPS estimate to $5.15 from $560M on revenues of $2.29B (down 4.5%). For 2016, they are reducing EPS estimate to $5.50 from $6.15 on revenues of $2.36B, down from their earlier $2.5B estimate.

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

Shares of Teledyne closed at $89.85 yesterday.

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