UPDATE: Drexel Hamilton Initiates FLIR Systems with Buy, $22 PT on Outlook

Drexel Hamilton initiated coverage on FLIR Systems FLIR with a Buy rating and a price target of $22. Drexel Hamilton noted, "We think FLIR's U.S. Defense Department business has declined more than 40% the last two years – we have a further 10% annual decline in 2013 and 2014 factored into our forecast; however, this is somewhat offset by steady international government revenue and other U.S. work. Thus, we think our Government forecast is suitably conservative for a stock trading at ~11.5x 2012 P/E. … Despite our forecast being roughly in-line with the Street's, we expect multiple expansion once the market senses DOD revenue headwinds are abating and FLIR's commercial unit shows some resistance to macro issues." FLIR Systems closed at $18.84 on Thursday.