Tuesday, FBR Capital Markets upgraded Force Protection Inc. (FRPT) shares to Market Perform from Underperform and increased its price target to $6 from $3.
Analyst Patrick McCarthy noted that Force Protection reported much better-than-expected third quarter of 2009 results after the close on November 9. While the analyst is not convinced that these results are repeatable over the next several quarters, it looks as if fourth quarter of 2009 should be another strong quarter for the company.
Although the analyst's longer-term price target is $6.00, he thinks that the stock will likely trade as high as $8.00 to $9.00 in the near term, given recent strength on certain programs during the quarter, including the Buffalo, Force Armor, and independent suspension kits. However, in the analyst's view, at the current time, it is tough to make the case that these performance levels are sustainable.
The analyst upgraded the stock from Underperform to Market Perform and raised his price target to $6.00, which represents an EV/EBITDA multiple of 5.5x his 2009 estimate. While this multiple is at a discount to the comps, the analyst thinks it captures the risk associated with the company's "go-get" business, particularly internationally.
Currently, FRPT is up $0.22 or 4.30% and trading at $5.34.
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