Needham & Company Upgrades Cubic (CUB) to Buy
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Price: $10.81 +0.28%
Rating Summary:
5 Buy, 7 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 2
Rating Summary:
5 Buy, 7 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 2
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Needham & Company upgraded Cubic (NYSE: CUB) from Hold to Buy with a price target of $55.00.
The firm comments, "We are raising our rating on CUB to Buy from Hold, now that a distraction resulting from a modest restatement of the prior three years of financial results is behind the company and as investor attention likely focuses on a senior management transition. First, on the restatement, the company is now current with its financials, and the restatement had the effect of increasing revenues and earnings over the last three years. We believe the naming of a successor to Walter Zable, the company’s late founder and CEO, which we expect to occur early next year, will result in CUB gaining wider exposure among institutional investors. Although F13 represents a transition year for CUB, owing to the slowdown in the defense business, we expect gradual sequential improvement over the course of F13, followed by a solid rebound in revenue and EPS in F14. With the stock trading at ~6x EV/TTM EBITDA, and at a discount to its peers, we believe CUB shares more than adequately reflect the challenging outlook in the defense business (~60% of revenues) over the next year. We believe the outlook for the Transportation business (~40% of revenue) remains solid given the company’s strong backlog."
For an analyst ratings summary and ratings history on Cubic click here. For more ratings news on Cubic click here.
Shares of Cubic closed at $46.25 yesterday.
The firm comments, "We are raising our rating on CUB to Buy from Hold, now that a distraction resulting from a modest restatement of the prior three years of financial results is behind the company and as investor attention likely focuses on a senior management transition. First, on the restatement, the company is now current with its financials, and the restatement had the effect of increasing revenues and earnings over the last three years. We believe the naming of a successor to Walter Zable, the company’s late founder and CEO, which we expect to occur early next year, will result in CUB gaining wider exposure among institutional investors. Although F13 represents a transition year for CUB, owing to the slowdown in the defense business, we expect gradual sequential improvement over the course of F13, followed by a solid rebound in revenue and EPS in F14. With the stock trading at ~6x EV/TTM EBITDA, and at a discount to its peers, we believe CUB shares more than adequately reflect the challenging outlook in the defense business (~60% of revenues) over the next year. We believe the outlook for the Transportation business (~40% of revenue) remains solid given the company’s strong backlog."
For an analyst ratings summary and ratings history on Cubic click here. For more ratings news on Cubic click here.
Shares of Cubic closed at $46.25 yesterday.
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