RBC was the downgrade and I sure would like to see the report that moved their price target down from 170 to 155. On the same day JPM issued an overweight so it may be the good cop bad cop thing. Zacks had a neutral on 6/27 but now have a buy on them. But ATK has a contract win for every month of the year, 28% increase in per share in earnings, increased revs by 19% so what's not to like? The spin off or acquisition? They have reiterated guidance.
Frankly, these prices (ORB and ATK). Are starting to make sense. The one thing that I hope someone could explain is the expected PE multiple for the Sporting spinoff. The new aerospace/ defense company, OA, should have earnings of roughly 4 per share and 60mil shares outstanding. At a 15 multiple that company would have a price of around 60. Pre merger ,ORB would be priced around 26.70. It is now at 26. The 4 per share earnings would come from ...1.20 ORB and 2.80 ATK ( It is projected to earn about 5..75 pre merger, but that is based on a 30mil share count).
So currently ATK is priced at 130. If one were to subtract the OA portion , the Sporting spinoff would be valued at 70. With earnings at 5.75 per share, that yields about a 12 PE. Does that sound right? Am I missing something in this analysis?