RBC Capital upgraded ManTech International (MANT), a provider of information-technology services, to outperform from sector perform.
Analyst Cynthia Houlton says, while many U.S. government services stocks are trading at historically high valuations, ManTech's stock has remained at a discount. She doesn't think this difference accurately reflects strong industry demand dynamics or ManTech's company-specific fundamentals. Industry-wise, she believes defense and intelligncy agency spending will remain robust.
Houlton thinks the fiscal 2004 defense budget is on track to get signed in October. She notes President Bush is asking for $87 billion of supplemental funds. Houlton upped her $1.08 2003 earnings per share estimate to $1.09, and upped the $1.23 2004 earnings per share estimate to $1.27, excluding any acquisitions.