Raymond James Cuts FLIR Systems to Outperform from Strong Buy

Says the company has lost business with the Marines

Raymond James cut its rating on FLIR Systems (FLIR ) to outperform from strong buy, explaining that the company had its second consecutive Marine Corp. contract loss.

Analyst Brian Gesuale believes that while there many other elements to the company's story, sentiment will take a hit, visibility into future backlog will deteriorate, and the upside "whisper" number in 2006 will become less likely. He notes that the Marines awarded a $660 million contract for the Long Range Thermal Imager (LRTI) to Elbit Systems (ESLT ). He also feels that a pair of Marine setbacks puts modest incremental pressure on FLIR's thermography business, a new product group to produce upside to Street expectations. He cut his $37 target to $34.

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