Why L-3 Communications (LLL) Stock Is Gaining Today

NEW YORK (TheStreet) -- Shares of L-3 Communications Inc  (LLL) are gaining 1.24% to $113.45 in early-market trading after the company was upgraded to "outperform" from "market perform" at Oppenheimer Holdings Inc (OPY) this morning.

The firm set a price target of $128 and cited the recent pullback in shares.

Analysts at Oppenheimer added that defense spending is likely near an inflection point.

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Separately, TheStreet Ratings team rates L-3 COMMUNICATIONS HLDGS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate L-3 COMMUNICATIONS HLDGS INC (LLL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and solid stock price performance. 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:

  • Net operating cash flow has increased to $277.00 million or 10.80% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.42%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • LLL, with its decline in revenue, slightly underperformed the industry average of 1.4%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • L-3 COMMUNICATIONS HLDGS INC's earnings per share declined by 13.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, L-3 COMMUNICATIONS HLDGS INC increased its bottom line by earning $8.54 versus $8.03 in the prior year. For the next year, the market is expecting a contraction of 6.3% in earnings ($8.00 versus $8.54).
  • You can view the full analysis from the report here: LLL Ratings Report

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