D.A. Davidson Believes Restructuring Will Be Good for Tetra Tech

In a report published Thursday, D.A. Davidson analyst John B. Rogers reiterated a Neutral rating and $27.00 price target on

. In the report, D.A. Davidson noted, “Following a previously announced strategic review of the segment, Tetra Tech announced it will be exiting a substantial portion of its construction operations, including lump sum fixed price civil and other construction work. The company plans to retain environmental remediation, pipeline, solid waste and utilities related activity. We estimate the discontinued operations generated approximately $350 million of revenue in FY14 and operating losses. The remaining construction businesses will be consolidated into the company's remaining segments in FY15 and beyond, with the discontinued operations sold or closed by calendar year-end.” Tetra Tech closed on Wednesday at $25.22.