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Elbit Systems Upgraded to Strong Buy

Zacks Equity Research

Zacks Investment Research upgraded Elbit Systems Ltd. (ESLT) to a Zacks Rank #1 (Strong Buy) on Aug 27, 2013.

Why the Upgrade?

Elbit Systems reported an impressive financial result for the second quarter of 2013 on Aug 13, 2013. Non-GAAP EPS came in at $1.19, up compared with $1.14 reported in the year-ago quarter due to healthy revenue performance and strong margins in the quarter.

Revenue grew 3.9% year over year on the back of higher revenue generation at Elbit Systems’ Airborne Systems and Electro-optic systems businesses. Revenue generated in Israel, Europe and Latin America grew 30.0%, 18.4% and 5.0%, respectively.

Elbit Systems reported 0.5% sequential increase in backlog of orders in the second quarter. Of the total backlog, 67% are from outside Israel.

Talking of margins, gross margin increased 90 basis points (bps) year over year to 28.9%. Higher gross margins and lower operating expenses led to 330 basis points increase in operating margin.

In the last 30 days, the Zacks Consensus Estimate for Elbit Systems remained stable at $4.31 for 2013 while it increased by 4.8% to $5.05 for 2014. Also, the company has a positive earnings surprise average of 35.8%. Considering these along with the impressive second quarter result and strong backlog position, expectation is high for another quarter of solid performance.

Other Stocks to Consider:

Elbit Systems is a $1.8 billion company engaged primarily in the production, development and integration of defense systems and products.
Other stocks to watch out for in the industry are Alliant Techsystems Inc. (ATK) with a Zacks Rank #1 (Strong Buy) while Curtiss-Wright Corporation (CW) and Ducommun Inc. (DCO), each come with a Zacks Rank #2 (Buy).

Read the Full Research Report on ATK

Read the Full Research Report on CW

Read the Full Research Report on DCO

Read the Full Research Report on ESLT

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