Alliant Techsystems (ATK) Still a "Buy", Says TheStreet

Tickers in this article: ATK

NEW YORK (TheStreet) -- TheStreet Ratings team reiterates Alliant Techsystems as a Buy with a ratings score of A-.

Financial services firm Janney Montgomery recently upgraded its rating on the stock to "buy" from "neutral" and allocated a $49 price target. The firm said it has revised its recommendation given it believes the company can cut costs and exceed low earnings expectations.

In pre-market trading, shares have edged 0.64% higher to $126.05.

TheStreet Ratings Team has this to say about their recommendation:

"We rate ALLIANT TECHSYSTEMS INC (ATK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 43.00% and other important driving factors, this stock has surged by 88.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ATK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ALLIANT TECHSYSTEMS INC has improved earnings per share by 43.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ALLIANT TECHSYSTEMS INC increased its bottom line by earning $8.32 versus $7.93 in the prior year. This year, the market expects an improvement in earnings ($9.34 versus $8.32).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 42.3% when compared to the same quarter one year prior, rising from $65.06 million to $92.59 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.