J.P. Morgan Downgrades Comtech Telecommunications, Lowers PT

In a note out today, J.P. Morgan downgraded Comtech Telecommunications

to neutral from overweight while lowering the price target on the stock to $27 from $31. The new price target is below where the shares currently trade. “CMTL reported solid Q1 results with a healthy EPS beat, yet our most significant takeaway is that there is a challenging road ahead. We found management's tone on the remainder of the year quite cautious, both on the conference call and in its 10Q filing. Activist investor MMI Investments withdrew its board nominees recently and the stock declined accordingly, although it has not fallen all the way back to the trading level prior to MMI's involvement. With a 10% return YTD, CMTL has outperformed the S&P 500 by ~1,000 bps and has been the second best defense performer in our coverage (behind LMT). As a result of the strong stock performance and challenging fundamental outlook, we are lowering our rating from OW to Neutral,” the bank said in the note.