Elbit Systems a "red-hot stock" - Bloomberg

Elbit Systems helmet
Elbit Systems helmet

"Bloomberg" reports data to show that the Israeli defense electronics company's stock is underpriced.

Analysts covering Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) have told "Bloomberg" that the Israeli defense electronics company is trading relatively cheaply compared with other companies in the sector, and that even though the share price is already at a record high, it can be expected to rise.

Blue Star Global Investors LLC research director Bruce Schoenfeld said, “They’re gaining traction in what is the biggest growth market for defense spending. It’s reasonably valued and they operate in the sweet spot.”

Decscribing the share as a "red-hot stock" "Bloomberg" data show that Elbit Systems is trading at 14.7 times projected 12-month earnings, compared with a 19.4 average among industry peers.

"Bloomberg" added that Elbit’s rally has also been fueled by the depreciation of the Israeli shekel, which has lost 14% since June 2014 and by a 2.6% rise in profits in the fourth quarter of 2014 to $44 million, while revenue rose 4.8% to $850 million. The company's backlog of orders was $6.3 billion at the end of 2014, up 8% from 2013.

“Elbit has a much better overall growth profile than most defense companies, because they’re not just primarily exposed to the U.S. and Europe,” said Rahul Sharma, who helps oversee about $5.5 billion, including Elbit shares, at Schafer Cullen Capital Management in New York. “Just like anywhere, tech is the fastest growing area, and they have a strength there.”

As Elbit Systems diversifies its markets, sales to Latin America and Asia have overtaken US sales, and now represent 35% of revenue compared with 28% in 2013. Growth in defense shekel-pound exchange rate[ending in these markets is expected to grow 5% annually until 2018 compared with just 0.2% annually in the US market.

Published by Globes [online], Israel business news - www.globes-online.com - on April 12, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Elbit Systems helmet
Elbit Systems helmet
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