UPDATE: BofA Securities Downgrades Maxar Technologies Ltd (MAXR) to Underperform

BofA Securities analyst Ronald Epstein downgraded Maxar Technologies Ltd (NYSE: MAXR) from Neutral to Underperform with a price target of $25.00 (from $36.00).

The analyst comments "We update our model post 1Q22 to account for lower revenue and margin expectations. Although MAXR did not change its outlook, we slightly lower our revenue growth estimate for 2022 to 0.6% from 1.4%, with pressure on both Space Infrastructure and Earth Intelligence (EI). We also lower our adjusted EBITDA margin expectation for EI to 43.5% from 45%. For 2022, our EPS estimate decreases to $(0.60) from $0.25 as we assume that continued cost headwinds from 1Q linger through the rest of the year. In the out years, a combination of higher cost of goods sold (COGS) and increased depreciation (Legion’s first six satellites cost >$700mn now) weigh on our forecasts, taking our 2023 estimate to $(0.20) from $1.75 and 2024 to $0.50 from $2.95. We note that we also increase our capex expectations, as we see the company spending on the WorldView-3 replacement sooner than we previously did. We do not see capex reaching the proclaimed $100mn holiday on an annual basis. We also see risk to management’s 2023 EBITDA target. We lower our PO to $25 based on a relative EV/EBITDA multiple on revised 2023 estimates. Given the downside risk to today’s price levels, we downgrade MAXR to Underperform from Neutral."

For an analyst ratings summary and ratings history on Maxar Technologies Ltd click here. For more ratings news on Maxar Technologies Ltd click here.

Shares of Maxar Technologies Ltd closed at $29.06 yesterday.

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