Jefferies raises target, cuts estimates on Exelis

Exelis (XLS +2.1%) has its price target hiked to $18 from $17 at Jefferies.

"Q3 book-to-bill of 1.7x and productivity improvements should drive revenue and profitability growth in Q4," analyst Howard Rubel says.

Nevertheless, Rubel cuts his Q4 and FY13 EPS estimates to $0.44 from $0.49 (consensus is $0.46) and to $1.50 from $1.55 (consensus is $1.50), respectively.

On the Q3 CC, Rubel asks management about an increase in the amount of restructuring expenses included in FY13 guidance (now $85M versus $70-80M previous): "Can you elaborate a little bit on why you've increased the amount?," Rubel asks. "We changed the pension in the middle of the year, that gave us a little bit of a tailwind [so] you could sort of say we used some of that upside to accelerate some restructuring," CFO Peter Milligan responds, adding that the move should benefit results in 2014. (transcript)

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