Zacks Investment Research downgraded shares of Harris Corporation (HRS) from NEUTRAL to UNDERPERFORM on April 22, 2013, with a target price of $38.00.
We are downgrading our recommendation on Harris to Underperform. The company is suffering from tightness in the U.S. government spending for defense coupled with a slowdown in international defense expenditures. The reduction in budget spending that began last month resulted in delays in tactical radio procurements coupled with the growing concern that major tactical radio orders from international markets will be postponed to later this fiscal or early in the next. At the same time, demand for the high-margin Integrated Network Solution products are weaker than expected primarily due to a delay in the healthcare software release and poor performance by the CapRock division. Consequently, for the second time in the last one year, Harris reduced its guidance for full-year 2013. We believe that the ongoing defense budget contraction will continue to affect Harris in the long run and see no immediate growth catalyst.
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