J.P. Morgan Overweight on Comtech Telecommunications

J.P. Morgan Chase & Co. is out with a research report on Comtech Telecommunications (NASDAQ: CMTL) and it has an Overweight rating and a $31 price target on shares.

In a note to clients, J.P. Morgan Chase & Co. writes, "Despite an EPS beat, CMTL's quarter was largely as expected, with the themes continuing to be the winding down of the MTS and BFT-1 contracts, a mixed outlook for the core business, and continued uncertainty on the strategic front. Management guided to flat to slightly up core (ex MTS and BFT-1) revenue, but the weakening backlog and poor fundamental environment for defense create risk to this outlook. The emergence of MMI Investments as an activist shareholder is another recent development. CMTL has recently demonstrated an increasing focus on returning cash to shareholders, which we applaud given the company's large cash balance and lack of attractive alternatives, but these moves may not be enough to satisfy all shareholders, particularly since management remains focused on making acquisitions."

Shares of CMTL closed at $28.25 yesterday.