NEW YORK (TheStreet) -- L-3 Communications (LLL) has been upgraded to "sector perform" from "underperform" with an $120 price target, RBC Capital said Tuesday. The firm said the revision was due to the outlook for the U.S. defense budget stabilizing.
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Separately, TheStreet Ratings team rates L-3 COMMUNICATIONS HLDGS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate L-3 COMMUNICATIONS HLDGS INC (LLL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, LLL's share price has jumped by 45.15%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LLL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $646.00 million or 19.85% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.99%.
- LLL, with its decline in revenue, underperformed when compared the industry average of 7.2%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: LLL Ratings Report