RBC Capital maintained an Outperform rating on Booz Allen Hamilton (NYSE: BAH), and cut the price target to $35.00 (from $36.00), following the company's 3Q earnings report. BAH reported adjusted EPS of $0.41, which was 3% better than consensus estimates. Booz posted a record book-to-bill of 3.5x last quarter, and has followed up on this performance with another seasonally strong .64x book-to-bill this quarter. Management still expects to see modest organic growth next year on the back of their strong bookings, and with staffing levels, onboarding and bid & proposal all ramping to support this effort the EBITDA margin profile is still expected to be flat y/y at roughly 9.9%.

Analyst Robert Stallard commented, "BAH reported F3Q16 GAAP/Adj. EPS of $0.71/$0.41, which was 80%/3% better than consensus estimates. The strong GAAP beat was driven by the release of a tax reserve, but the underlying Adj. EPS was in-line with our expectations. Topline was flat at $1.3bn, and operating margin was also flat as expected due to increased bid and proposal activity in order to support a revenue ramp. BAH tightened its full-year guidance for sales growth of 0-2% (vs prior +/-2%), GAAP EPS of $1.87-$1.93 (vs. prior 1.55 -1.65) and Adjusted EPS of $1.61-$1.67 (vs. prior $1.60 - 1.70)."

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Shares of Booz Allen Hamilton closed at $27.62 yesterday.