Zacks Investment Research upgraded shares of L-3 Communications Holdings Inc. (LLL) from UNDERPERFORM to NEUTRAL on December 17, 2012, with a target price of $79.00.
L-3 Communications Holdings Inc. has ample opportunity for growth and profit expansion after the favorable conclusion to the spin-off of its Government Services businesses. The company has retained its profitable Cyber, Intelligence, and Security Solutions business. The spin-off also removes a lot of uncertainty with respect to revenue and takes away some of the low margin businesses of the company. Over the longer run, we view the company as one of the best-positioned pure defense players based on its non-platform focus, broad diversification of programs and its focus on shareholder value. However, negative offsets include the loss of key contracts, defense spending cuts and the lack of near-term catalysts. Order growth and volume increases also remain dubious in this challenging environment. Thus we would advise investors to remain on the sidelines for now until the ongoing macro headwinds subside.
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