ARGON ST, Inc. (STST) Downgraded To Perform

Analysts Myles Walton and Ed Keller at Oppenheimer (NYSE: OPY) have downgraded ARGON ST, Inc. (NASDAQ: STST) to a Perform rating. The company has reported results for the first-quarter.

ARGON ST reported EPS of $0.21, which was ahead of consensus estimate of $0.20 but trailed analysts’ estimate of $0.25. The company reported sales of $73 million, a decline of 13% year-over-year. Analysts had estimated sales of $89 million for the quarter. The company posted an operating margin of 10.2% for the quarter, an improvement of 110 basis points.

According to analysts, the company’s sales target for FY10 is unachievable. Analysts believe that with the ARGON ST, Inc. in play as an acquisition target, there is little in the results that dissuades them from their prior take-out value of $28. According to analysts, the interest for the company is strong, though any breakdown in a potential deal could push the stock below $20.