JP Morgan Ups Alliant Techsystems to 'Buy'

Analyst Joe Nadol likes the defense contractor's revenue growth and better-than-expected free cash flow

Alliant Techsystems (ATK ) JP Morgan upgraded to buy from market perform.

Analyst Joe Nadol says Q3 EPS of $0.01 was ahead of his estimate. He says revenue growth was impressive, up 68%; driven by strong increases in small-caliber ammunition. He adds that free cash flow performance also is stronger than expected at $45 million, due to timing issues and overall strong performance. He bumped his $3.62 2002 EPS estimate to $3.65, and set a $4.80 2003 EPS (GAAP) estimate. Nadol says his upgrade is based on strong results, the emergence of an improved macro environment for defense industry this weekm and the stock's recent underperformance. Finally, Nadol raised his target to $88.

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