BMO Capital Markets still lukewarm on Maxar Technologies

Maxar Technologies (Maxar Technologies Stock Quote, Chart, News TSX:MAXR) made a big move last week on the M&A front but the space and satellite imagery company is still a pass for BMO Capital Markets analyst Thanos Moschopoulos, who recently reaffirmed his “Hold” rating on the stock.

Maxar’s share price is up almost 15 per cent since the company broke the news on June 23 that it would be taking full ownership of 3D data and analytics company Vricon, a joint venture it has held with Swedish aerospace company Saab over the past five years.

Maxar says it will fund the $140-million purchase by issuing $150 million in senior secured notes and maintains the move is a strong one for the company since Vricon’s products and technology are well-aligned with Maxar’s Earth Intelligence growth strategy along with priority mission areas from the US National Defense Strategy.

“Maxar commercial satellite imagery has long been foundational to U.S. and allied defense and intelligence operations, and this acquisition will enable training, simulation and tactical missions to be conducted in highly immersive and accurate 3D environments,” said Dan Jablonsky, Maxar’s CEO, in a press release.

Moschopoulos has stuck to his “Hold” rating, however, with a one-year target price of $19.00 per share, which at press time represented about a three percent projected return.

Maxar has fallen a long way over the past two years due to a number of factors, from debt problems to charges of accounting missteps, a writedown of its satellite business and the loss of a prime revenue-generating satellite.

Earlier this year, Maxar sold off the Canadian leg of its business, MDA, which makes aerospace gear, robotics and satellite components, and pushed ahead with its DigitalGlobe business, focusing its interests in the geospatial data, space analytics and space infrastructure industries.

The stock is up 22 per cent year-to-date and up 140 per cent over the past 12 months.