J.P. Morgan Maintains Rating, PT On TSYS In 1Q11 Preview

J.P. Morgan, previewing 1Q11 results, is maintaining its Overweight rating and a price target of $7 on TeleCommunication Systems TSYS. Says J.P. Morgan, in its report, “A slow start for the government segment owing to budget uncertainties could yield a weak 1Q; however, we expect TSYS management to maintain expectations for a back-end loaded 2011. We recently learned that TSYS has been selected as a participant in the $5 billion 10-year Future Commercial Satellite Communications (COMSATCOM) Services Acquisition (FCSA) program, which gives us more confidence in our longer term forecast. The pushback on TSYS has been a lack of visibility and the fact that contract awards have been lopsided, in favor of the low- margin Government Systems (GS) business; however, we believe TSYS's commercial business is tracking expectations, and TSYS's positioning on government ISR contracts remains good.” TSYS closed yesterday at $4.21.