CIBC: Elbit Systems will benefit from Tadiran synergy http://www.globes.co.il/serveen/globes/docview.asp?did=1000213659&fid=942
CIBC has upped its target price for Elbit to $52
Erez Wollberg 20 May 07 16:58
CIBC World Markets has published an update on Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) in which rated it "Sector Performer" with a target price of $52, 44% higher than its previous target price.
"Even with the Elisra integration taking longer than expected, Elbit Systems continues to deliver strong results, growing revenue 20% organically year-on-year and once again delivering solid earnings per share," says CIBC. "Further, with the Tadiran Communications acquisition complete, opportunities for top-line synergy and 2008 upside appear to be expanding."
CIBC adds that Elbit Systems first quarter revenue of $404 million beat the market estimate which predicted $381 million in revenue, and its own estimate of $397 million in revenue. The company's earning per share of $0.45 was in line with CIBC's consensus but $0.02 higher than the market consensus.
Commenting on Elbit Systems' recent acquisition of Tadiran Communications, CIBC says, "We are adjusting estimates to reflect the Tadiran acquisition and positive momentum in multiple geographies and product lines. Our full year expected revenue moves to $1.83 billion from $1.64 billion and earnings per share to $2.22 from $2.00."
As for its increase in target price for Elbit Systems to $52, CIBC says, " Our target price is achieved by applying 18x to our full year 2008 expected earnings per share of $2.88. The target multiple is in the middle of peers' 15x-20x range, and is supported by Elbit Systems' growth, solid cash flows, and upside potential."