UBS on U.S. Defense: Lack of Downside Catalysts, For Now
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Price: $383.42 +0.32%
Rating Summary:
18 Buy, 12 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 14 | Down: 24 | New: 9
Rating Summary:
18 Buy, 12 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 14 | Down: 24 | New: 9
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UBS on U.S. Defense: Lack of Downside Catalysts, For Now
Analyst, David E. Strauss, said, "With uncertainty surrounding the FY13 budget now behind and continued yield support, we see a lack of catalysts to move the stocks much lower near-term. While we believe FY13 modernization, down 6% in budget down 1%, was slightly worse than expected, we think 2012 consensus expectations/guidance remain achievable."
"We favor General Dynamics (NYSE: GD) and Raytheon (NYSE: RTN) with Lockheed Martin (NYSE: LMT) our least preferred given a premium valuation, heightened F-35 risk as it books significant Lot 4 fixed price revenues along with limited upside to boost its cash return to shareholders. We estimate LMT will have to continue to borrow to sustain its current rate of cash return."
Analyst, David E. Strauss, said, "With uncertainty surrounding the FY13 budget now behind and continued yield support, we see a lack of catalysts to move the stocks much lower near-term. While we believe FY13 modernization, down 6% in budget down 1%, was slightly worse than expected, we think 2012 consensus expectations/guidance remain achievable."
"We favor General Dynamics (NYSE: GD) and Raytheon (NYSE: RTN) with Lockheed Martin (NYSE: LMT) our least preferred given a premium valuation, heightened F-35 risk as it books significant Lot 4 fixed price revenues along with limited upside to boost its cash return to shareholders. We estimate LMT will have to continue to borrow to sustain its current rate of cash return."
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