June 27 (Bloomberg) -- Elbit Systems Ltd. fell the most in five months on speculation gains that sent the Israeli defense developer’s shares to an 18-month high were overdone.
The Haifa-based company declined 3.6 percent, the most since Jan. 20, to 153.80 shekels, or $42.37, at the close in Tel Aviv. The stock reached the highest since November 2011 on June 17. Elbit’s price-to-earnings ratio climbed to 10.9 on June 18, the highest this year and compared with a multiple of 10.5 for Bethesda, Maryland-based Lockheed Martin Corp.
“Shares are giving back some of their gains as investors make the most of the recent advance,” Dov Rozenberg, an analyst at Clal Finance Batucha Brokerage Ltd. in Tel Aviv, said by phone today. Rozenberg rates the shares the equivalent of hold, with a price estimate of $45.
Elbit, which got 31 percent of revenue from the U.S. in 2012, is searching for new markets to prop up earnings as the Pentagon cuts spending to rein in budget deficits. The company said it received a $115 million contract with an Asian customer for electronic warfare systems in March. A month later, it got a $40 million contract from a country in Africa.
The shares have gained 0.1 percent this quarter, compared with an a decline of 3.9 percent for the country’s benchmark TA-25 Index.
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