BB&T Capital Markets Maintains Buy Rating For SAIC (NYSE: SAI)

Following the release of the Q4’10 report, analysts at BB&T maintain their Buy rating for SAIC (NYSE: SAI). Analysts were prepared for the numbers in the Q4’10 report and they look to the future in their evaluation of the company.

“We believe the primary focus of investors will be on SAI’s FY’11 guidance. Management revised its previous FY’11 guidance range lower while abandoning the long-term financial goals that have been in place since the firm’s IPO.” Putting this information into perspective, they add, “We are not entirely surprised regarding guidance and do not believe it is as bad as i may sound. Our FY’11 revenue estimate was below management’s guidance and in our view the street was already expecting somewhat slower growth in FY’11. We are maintaining our Buy (1) rating.”

SAI’s reported revenue of $2.68B is slightly shy of BB&T’s $2.70B estimate, however SAI’s reported internal growth of 3.6% is inline with BB&T’s estimate.

Addessing valuation, analysts said, “On an EV/EBITDA basis, SAI trades at 6.0x our CY’11 estimate (a 14% discount to our view of its peer group). On a P/E basis, the shares are trading at 12.7x (a 5% discount) based on our CY’11 EPS estimate of $1.50.”

Analysts set a 12-month price target of $23 and commented on this by saying, “Our $23 price target is based on SAI trading at a FFQ EV/EBITDA target multiple of 8x and a FFQ P/E multiple of ~15x one year from now.”