Industrial Alliance says Macdonald Dettwiler is firing on all cylinders

Industrial Alliance Securities analyst Al Nagaraj says Macdonald Dettwiler (Macdonald Dettwiler Stock Quote, Chart, News: TSX:MDA) is beginning to capitalize on growing international demand for its satellite and remote sensing capabilities.

On Friday, Macdonald Dettwiler reported its Q1, 2013 numbers. The company earned $2.2-million on revenue of $428.6-million. MDA noted that order booking was particularly strong, with an order backlog of $3-billion coming from EchoStar and from the Canadian Space Agency.

MDA is also bidding for an additional $2 billion dollars worth of contracts this year which does not show in the backlog. MDA provides advanced technological solutions in a cost effective manner therefore it will be minimally affected by sequestration related budget cuts in the U.S.

Nagaraj notes that, for the first time in its history, Macdonald Dettwiler is bidding for projects in the U.S. as a prime contractor. He says that in addition to its robust order backlog, MDA is bidding on another $2-billion in contracts this year. He says that because the B.C.-based company provides advanced technological solutions in a cost effective manner it will be minimally affected by sequestration related budget cuts in the U.S.

In a research update to clients this morning, Nagaraj reiterated his BUY rating and one-year price target of $87. The Industrial Alliance analyst says his target is based on 12.9x the $6.78 he expects MDA will earn in fiscal 2014.

Shares of MDA closed today down .1% to $71.22.

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