CSRA Initiated With A Buy Rating At Rafferty

Rafferty Capital Markets issued a note on CSRA Inc. CSRA, initiating coverage of the stock and noting that there is potential for significant upside from current price levels. CAnalysts at Rafferty rate CSRA as a Buy with a price target range of $33-$39.

The firm wrote, “When we first assessed the CSC/CSRA break-up in our Spin Talk & Pipeline Update edition of November 24, 2015, we noted our preference for CSRA over CSC CSC as a value proposition. Following further analysis, we initiate formal coverage of CSRA...offering ~25 percent to 50 percent upside from the prevailing share price.”

On February 10, CSRA reported Q3 EPS of $0.48, exceeding consensus estimates of $0.42 per share, and revenue of $1.32 billion, which was in-line with expectations. However, the company, which specializes in IT and operations-related services for the U.S. Government, offered a mixed outlook for Q4 2016, forecasting EPS of $0.45-$0.49, versus consensus of $0.41 and revenue of $1.28-1.33 billion, vs. analysts expectations of $1.37 billion.