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Cubic Shares Fall As Analyst Notes Limited Upside

WASHINGTON (AP) ¿ Shares of Cubic Corp., which makes military training simulators and fare-collection systems for mass transit, sank Thursday as a Wall Street analyst forecast stronger demand for military training, but noted stock growth will be limited due to its recent run-up.

Cubic, based in San Diego, lost $2.29, or 6 percent, to $35.55 in afternoon trading. The company's stock has traded between $17.03 and $40.66 over the last 52-week period. The stock has gained 39 percent since January.

Boenning & Scattergood analyst, Michael Ciarmoli, began coverage of Cubic with a "Neutral" rating, saying despite strong global demand for military services, the recent stock run up leaves little room for upside.

"Ever present global demand for military training systems and services should position Cubic for growth even as the U.S. defense budget flattens," said Ciarmoli, in a note to clients. "Spending on military training stays hot as the defense budget cools."

As the Pentagon puts more emphasis on irregular warfare in Afghanistan and Iraq, military training will be necessary across the services to learn new techniques to manage counterinsurgency and defeating explosive devices, he said.

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