ManTech Downgraded By Credit Suisse After 33% 2016 Run

Following the run up in its share price over the past five months, Credit Suisse’s Robert Spingarn believes Mantech International Corp MANT shares are expensive at present.

Spingarn downgraded the rating on the company from Neutral to Underperform, while lowering the price target from $37 to $36.

Stock Too Expensive

“While we expect organic growth trends to remain positive across the government services sector, the last ~5-months have seen MANT shares rise beyond our fair value estimate,” the analyst mentioned.

The stock now trades at 7.3 percent free cash flow yield on the 2017 estimates, making ManTech International the second most expensive stock, although the company’s operating margins are expected to continue to be 200 bps below that of its peers in the near term.

Related Link: Wells Fargo Downgrades ManTech International To Underperform

Organic Growth

Spingarn believes the company’s organic growth during H2 could be muted by small business trends.

Following the 1.2 percent organic growth in H1, management guided to continuing positive organic growth in H2 — although, it could remain muted, driven by “recent customer award trends that favor small business,” the analyst stated.

This could imply further downside to the 1.3 percent implied organic growth expected in H2.

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