Join        Login             Stock Quote

Rockwell Collins (COL) Downgraded to 'Perform' by Oppenheimer on Valuation

 November 29, 2012 10:35 AM

(By Balachander) Rockwell Collins Inc. (NYSE: COL) shares were downgraded to "perform" from "outperform" by Oppenheimer & Co. Inc., citing valuation.

The brokerage, which also removed its price target of $58 on the stock, said the valuation reflects more fairly COL's risk-reward ratio moving forward.

"Looking out a bit, there's much to like about COL, particularly in its commercial transport business, where a string of new platform introductions offers the prospect of sustained double-digit growth starting in 2014," the brokerage said.

"Still, we'd rather buy COL when valuation and estimates reflect more reserve with regard to this potential and give more weight to the possibility of near- to medium-term program delays and macro pressures," Oppenheimer wrote in a note.

[Related -The Industrial Sector Offers A Lot Of Value, Dividend Growth And Income]

In COL's business jet segment, Oppenheimer wrote, the picture looks mixed. The good: COL has several new platforms layering in over the next few years, including the Legacy 450/500, the Learjet 85, and the Global 7000/8000. The bad: these gains may be substantially neutralized by headwinds at Cessna and the loss (to bankruptcy) of Hawker.

Oppenheimer said upside to its commercial revenue estimates could arguably result from better than expected global growth or a resurgence in global business, which could boost commercial transport aftermarket and business jet OE sales. "But this eventuality can be more efficiently exploited, in our view, through stocks such as BEAV."

[Related -Rockwell Collins Inc: Fundamental Stock Research Analysis]

The brokerage said risk appears balanced on the defense side of the business.

"On the upside, FY '13 could potentially end up slightly better than COL's guidance, which assumed a full year of sequestration. On the downside, any D.C. deal overturning sequestration likely extends the slow bleed into 2014 and potentially beyond," Oppenheimer wrote.

Rockwell Collins provides defense electronics and communications, avionics, and cabin electronics to military and commercial aviation OEMs, owners, and operators worldwide.

Shares shed 1.72 percent to trade at $55.56 on Thursday. Over the past year, the stock has been trading between $46.37 and $61.46.



Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageTackling China's Debt Problem: Can Debt-Equity Conversions Help?

China’s high and rising corporate debt problem and how best to address it has received much attention read on...

article imageWill Job Growth Kill The Bear-Market Signal For Stocks?

It’s all about jobs now. Actually, it’s always been about jobs. But the stakes are even higher—perhaps more read on...

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

Popular Articles

Daily Sector Scan
Partner Center

Related Articles:

Dividend Roundup: BGG, BX, COL, CY, ED, WWW
More Articles on: Finance , Aerospace

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.