Credit Suisse First Boston said on Thursday it was increasing its 12-month price target for Israel's defense contractor Elbit Systems to $23.50 a share from $20 to reflect a better business environment and higher sector rating.

"This reflects better earnings quality through top line growth and a higher defense sector rating due to increased defense related spending," analyst Ehud Helft wrote in a research note.

Elbit's Nasdaq share closed at $18.45 on Wednesday.

"Despite a 46% year-to-date increase in its share price, the company still trades on a 2002 price/earnings ratio of 14.3, representing a discount of 35% to its U.S. peers and 22% to the global defense average," Helft said.

Helft also raised his 2002 earnings per share estimate to $1.31 from $1.26.