ManTech Slides Over 7% After Credit Suisse Downgrade

Shares of Mantech International Corp (NASDAQ: MANT) suffered a drop of more than 7 percent after Credit Suisse downgraded the stock from Neutral to Underperform rating. The brokerage also slashed its target price from $37 to $36, implying a possible further downside risk.

Analysts Robert Spingarn and Jose Caiado pointed out that the stock has witnessed a strong run, making it a bit expensive now. The stock jumped about 33 percent in the year-to-date period ended September 28.

The lead analyst introduced his EPS estimates for the year 2017 and cited peer target FCF's 8 percent yield for reducing the price target.

"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. They trade at a 7.3 percent FCF yield on 2017 estimates, making it the second most expensive stock behind best-in-class blue-chip BAH, while operating margins are expected to remain ~200bps below peers through our forecast period," the brokerage said in a research note.

Credit Suisse is not ready to buy the company's organic growth target in the remaining period of the current year though it recorded 1.2 percent growth in the first half. The firm expects a downside of 1.3 percent to organic growth in the second half pointing out muted customer award trends favoring small business.

At time of publication, ManTech was down 7.01 percent at $37.41.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!