RBC Capital Says VSE Lacks Near-Term Catalysts - Read Why

  • RBC Capital analyst Ken Herbert downgraded VSE Corp VSEC to Sector Perform from Outperform on lack of near-term catalysts and strategic uncertainty.
  • The analyst also lowered the price target for VSEC to $48 (an upside of 27%) from $65.
  • Herbert believes that the aviation business will drive sentiment, and he likes the company's opportunities in both distribution and MRO.
  • Meanwhile, he added that the near-term outlook for margin upside is limited, and business mix headwinds have limited investor willingness to pay for the aviation upside.
  • The valuation remains attractive, but the analyst believes the stock lacks a near-term catalyst that will attract additional investor interest.
  • Price Action: VSEC shares are trading lower by 7.33% at $37.79 on the last check Wednesday.
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