CSFB Lowers Alliant Tech to 'Neutral'

Analyst Pierre Chao says the aerospace company's stock would fully discount the unlikely event of the U.S. ending its Space Shuttle program

Credit Suisse First Boston downgraded Alliant Techsystems (ATK ) to neutral from outperform.

Analyst Pierre Chao says he expected there would be some panic around the stock after the Columbia space shuttle blew apart on Saturday, especially given the stock's large ownership by aggressive growth and momentum oriented funds. But Chao says value investors should keep eye out for an overshoot, and look for buying opportunities.

In the worst case scenario, the U.S. would ultimately terminate NASA's Space Shuttle program, which he thinks is highly unlikely but he puts the possibility above 0%. Nevertheless, Chao says Alliant's stock would fully discount this unlikely scenario at $40 to $43 a share. Given the unlikely nature of that scenario, he says he would become an aggressive buyer if the stock hit the mid-$40s. Chao cut his $82 target to $55.

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