Thermal imaging company FLIR Systems, Inc. FLIR, which reported better-than-expected second-quarter earnings July 25, caught an upgrade Monday from William Blair.
The Analyst
William Blair's Louie DiPalma upgraded Flir Systems from Market Perform to Outperform.
The Thesis
DiPalma said he sees growth opportunities for Flir Systems.
In the near-term, sales should be positively affected by a strong economy and enhanced product capability, the analyst said.
The Point Grey acquisition turned Flir into a data analytics company, which should make its sensors more attractive to customers, DiPalma said. In the long run, thermal sensors will become common in autonomous vehicles, and Flir's sensors are superior to those made by major original equipment manufacturers, he said.
Nano drones have a significant opportunity to penetrate the Big Army and come into widespread use in the next five years, as the Department Of Defense is increasing its spending on drones by around 30 percent annually, DiPalma said.
The analyst said he expects Flir's multiple to expand on its growth opportunities as Wall Street starts to value it as a technology company. The major risk is the long-term nature of its catalysts, as it may take years for the positive scenario to play out, DiPalma said.
The Price Action
Flir Systems shares were trading up by 2.16 percent to $61.47 at the time of publication Monday.
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