UPDATE: Stifel Downgrades Science Applications (SAIC) to Hold
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Stifel analyst Joseph DeNardi downgraded Science Applications (NYSE: SAIC) from Buy to Hold with a price target of $90.00 (from $115.00).
The analyst comments "SAIC reported softer than expected F4Q21 results and provided FY22 guidance below expectations, continuing a trend seen across the industry over the past few months (except for KBR!). Interestingly, SAIC's sources of missed expectations were varyingly unique, being driven by lighter bookings at the end of FY21 (somewhat unique), a more meaningful impact from COVID (not unique), and a significant and surprising de-booking of backlog (unique). We need to better understand the nature of the de-booking and the degree to which margin and sales growth expectations have changed (messaging around both appeared more bearish to us). We rarely downgrade a stock on bad news but the confluence of factors against an already softish backdrop for the industry contributes to our more cautious view. Our revised $90 TP is based on shares trading at 12x FY22 EBITDA, vs. prior 13x, to reflect a softer outlook for sales growth and margin expansion."
Shares of Science Applications closed at $95.89 yesterday.
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