UPDATE: Piper Jaffray Reiterates Overweight and $32 PT on DigitalGlobe

In a report published Monday, Piper Jaffray reiterated its Overweight rating and $32 price target on DigitalGlobe

Piper Jaffray reported that, “With the acquisition of GEOY, DGI adds advanced production and analytic capabilities, expanded satellite capacity, and $1.8B of expected synergies. These incremental capabilities should drive faster revenue growth, higher margins and meaningfully improved free cash flow for the "New" DGI over the next several years. Management noted a "sea of opportunity" for pricing and capacity optimization in the combined entity, which we expect to drive mid-teens (or better) organic revenue growth and adj. EBITDA margins of 50%+ by 2015 (from 36% in 2013E). Importantly, DGI's library (which generated 90% of 4Q 2012 commercial revenues) and the cost and time to build satellites represent significant barriers to entry (see pg. 2 for a summary of competitive dynamics).” Shares of DigitalGlobe closed at $29.41 on Friday.