Zacks Investment Research upgraded shares of CRA International Inc. (CRAI) from UNDERPERFORM to NEUTRAL on October 08, 2012, with a target price of $18.00.
Following the footsteps of the previous quarter results, CRA International's second quarter 2012 results were also discouraging. The earnings lagged the Zacks Consensus Estimate significantly, owing to the weak management consulting business, resulting from poor performance of the Chemicals practice and Middle East operations. Moreover, we remain concerned about the ongoing economic uncertainty in Europe, cautious spending by clients, stiff competition and currency fluctuations. However, company's litigation business remains firm based on strong lead flow, an improved conversion rate and solid demand resulting in new projects. Moreover, the company's growth initiatives and healthy cash balance with no long-term debt augur well. Additionally, management is undertaking restructuring actions to improve profitability and boost performance. Hence, we upgrade our stance on the stock from Underperform to Neutral.
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