Friday, FBR Capital Markets reiterated Alliant Techsystems Inc. (ATK) stock with an Outperform rating, and a price target of $120. The brokerage raised its 2010 EPS estimate to $8.85 from $8.70, while maintaining its 2011 estimate of $9.00.
Analyst Patrick McCarthy noted that ATK continued its strong performance on February 4, by reporting third quarter results that were much better than expectations on the bottom line. Despite a slightly lower-than-expected top line, margins did not suffer, and the company was able to increase operating margins on both a year-over-year and sequential basis.
The analyst said that the company also raised expectations for fiscal 2010, primarily from the better-than-expected results in the third quarter as well as better visibility heading into the final quarter of its fiscal year. Heading into this quarter's results, the analyst thinks the Street's primary focus was on the company's commentary regarding the proposed cancellation of NASA's Constellation program.
Changes to Project Constellation are a risk to the company's space business, but the analyst thinks it is largely in the name and he thinks the probability of an outright cancellation is low.
The analyst said the company also announced Mark DeYoung will assume the role of president and CEO, effective immediately. Given his 25 years of experience at the firm and his track record at armament systems, the analyst believes DeYoung is a great fit for the role.
The analyst believes that the raised outlook, as well as the decent order flow, makes the fundamental valuation attractive; therefore, reiterating his Outperform rating. The analyst raised 2010 EPS estimate primarily due to higher margins at commercial ammo.
Until the analyst know more regarding Project Constellation, he would keep his numbers in line with guidance. Given the recent sell-off in the stock, the analyst thinks a cancellation has been priced in and would be buyers at these levels.
Currently, ATK is down $1.27 or 1.62% and trading at $77.08.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.