Raymond James Cuts CACI Rating

Analyst Brian Gesuale cites factors such as the company's inconsistent business development activity

Raymond James cut its investment opinion on CACI (CAI ) to market perform from strong buy.

Analyst Brian Gesuale cited organic growth at a multi-year low of 8.9%. He also thinks the company's large revenue base and inconsistent business development activity during the year is beginning to weigh on its top-line expansion. He has concerns that the 7% to 16% sales guidance ramp from the first half of 2006 to the second half of 2007 could prove aggressive, and he believes that recent awards will have to ramp up rapidly to get to those numbers. He sees the next 12 months focusing on the recompete business, and he believes there is no reason to expect losses on deals. Still, he thinks resources may need to be used to defend that business. He cut his $3.22 fiscal year 2006 (ending June) earnings per share estimate to $3.17.

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