FLIR Systems, Inc. (NASDAQ:FLIR) — This large-cap growth company designs, manufactures and markets camera systems, both thermal imaging and broadcast, for commercial and government markets.
Delays in the timing of government contracts have put a lid on the price of this stock. However, Standard & Poor’s upgraded their opinion on its shares from a “Hold” to a “Buy” last July and now highlight a backlog of $608 million, which should buy time until revenues from the government’s contracts materialize.
For 2017, S&P forecasts an expansion in margins given new product rollouts in surveillance and instruments for FLIR stock. Detection devices, for both government and commercial use, are areas in which this company has a focus. S&P forecasts that gross margins will expand to 48% this year from 47% last year, and they raised their 2017 EPS estimate to $1.85 from $1.80 and their 2018 estimate to $2.05 from $2.01. They have a 12-month price target of $41 on the stock, which pays a quarterly dividend of 15 cents for an annualized dividend yield of 1.6%.
The two trading rectangles are the principal features of the FLIR stock chart, thus I did not show the bullish support line that connects the low of October 2016 with prior lows in February 2016 and October 2015. Rectangles are consolidation formations that appear on the charts of many bullish “big-cap” stocks.
However, the two on this chart are unusual in that their support lines are formed from high-volume sell-offs coupled with lows that found support at the 200-day moving average. Buyers should be aware of this and not succumb to a “shakeout” if another high-volume round of profit-taking occurs.
Support is now at about $37. Therefore buy FLIR at $37 with a trading target of $43 for a proposed gain of 16%.
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