Expecting Buy Interest in FLIR Systems on SunTrust Note

SunTrust is out with an interesting call on FLIR Systems (FLIR), saying that last week, the U.S. Army posted a modification to its pending Forward Activity Detection System [FADS] program that could substantially increase the scope of this program from a 5,000-system, 1-year procurement to a potential 17,800-system, 5-year program to supply a new infrared-based Driver's Vision Enhancer - Family of Systems (DVE-FOS), replacing many of the DVE systems currently deployed by the military.

Although DRS Technologies is the incumbent supplier of this system to the Army, they believe FLIR is very well positioned to aggressively compete for this program based on the success of its currently fielded DVE systems used in the commercial automotive and trucking industries.

According to the firm, FLIR is likely pursuing several large programs of which DVE-FOS is only one. They view DVE-FOS as a substantial upside opportunity to go along with G-BOSS, VOSS, and SBINET. Firm believes FLIR is favorably positioned to win at least one of these large opportunities (G-BOSS in particular), leading to significant potential increases in both 2008 revenue and EPS estimates, and reiterate Buy rating and $42 target.

Notablecalls: Interesting comments buy SunTrust's Chris Donaghey. Expect to see some buy interest in FLIR today.

Editor's note: FLIR stock split 2:1 this morning, so some quotes may not be accurate.