Goldman Sachs Initiates Neutral Rating on Tetra Tech (TTEK)

Goldman Sachs is out with a research report this morning, where it initiates a Neutral rating on Terta Tech Inc.

; it has a $23.00 price target on the stock. The Goldman Sachs analysts believe that TTEK's low-risk, steady earnings stream is attractive for long-term investors (3-5 year horizon), though noted that organic growth will likely be challenged over the next 12 months, given leverage to North America. In addition, the analysts expect the multiple to remain suppressed given heightened scrutiny of public investment. As for valuation, the analysts remarked, “Our $23 12-month price target is based on 16.5X FY2011E EPS, a 30% premium to the S&P, consistent with its historical average premium.”