Aerojet Rocketdyne -5% as Jefferies downgrades to Hold from Buy

|About: Aerojet Rocketdyne Holdings... (AJRD)|By:, SA News Editor

Aerojet Rocketdyne (AJRD -5.5%) sinks after Jefferies downgrades shares to Hold from Buy with a $35 price target, following the stock's 59% run-up since the end of Q1.

Jefferies says the market has reset expectations for 2018, given H1's 13% revenue growth, but believes the new year may present some challenges, with the loss of a key program and more modest revenues for the Space Launch Systems program, which could contribute $260M to 2017 revenues but decline next year as the launch vehicle approaches first launch in 2019.

The firm also notes revenues from ULA have been rising even as the number of space launches has declined, but it expects volumes to decline 2018; it also believes Wall Street expectations do not account for the SLS program and ULA revenue headwinds of $120M and $140M, respectively, for 2018.