美国国防展望

1、14 January 2019 Americas/United States Equity Research Aerospace & DefenseResearchAnalystsRobertSpingarn212 5381895 HYPERLINK mailto:robert.spingarn JoseCaiado212 3256771 HYPERLINK mailto:jose.caiado AudreyPreston212 3252709 HYPERLINK mailto:audrey.preston ScottDeuschle212 3256116 HYPERLINK mailto:s

2、cott.deuschle Aerospace & DefenseSECTOR REVIEWSECTOR REVIEW2019 Defense OutlookOutlook and Ratings Changes: We remain broadly neutral on the group, and selectively bullish on names with strong micro stories and supportive valuations. We think that the group may trade more defensively in 2019 owing t

3、o these improved valuations, though ex-pension multiples do remain well above trough. See HYPERLINK /s/_XgIP4AN-8SW For Whom the Bell Tolls Revisited for more. In connection with our updated outlook, we are upgrading NOC to OP (from N), with our TP declining to $302 (from $311), but allowing 20% ups

4、ide in light of the recent sell-off. See HYPERLINK /s/_XgIZ4AN-Ytkb Rendezvous with Value: Upgrade to OP for details.Changing valuation methodology: We have adjusted our valuation methodology for all defense hardware companies in our coverage, and we are now using a PE multiple on our 2020 EPS estim

5、ates (vs DCFs previously). For LMT, RTN, NOC, and HII, we have elected to use an ex- pension multiple, owing to the materiality of pension to those names. For these companies valued on an ex-pension basis, we have added to this valuation our estimate for the present value of future pension cash flow

6、s, discounted back at 10%. This change in methodology results in us adjusting target prices downwards for LMT (to $297 from $357), RTN (to$173 from $196), GD (to $190 from $216), NOC (to $302 from $311), HRS (to $176 from $209), LLL (to $229 from $272), HII (to $235 from $261), and BWXT (to $43 from

7、 $46). We have also decreased our target prices for LDOS (to $72 from $82) and CACI (to $168 from $189) as we adjust our target multiples to align more closely with peers.Risks for our defense coverage include lower than expected Defense budget growth, pricing pressure from DoD, program cancellation

8、 risk, labor market tightness, rising competition, political risk, higher than expected pension contributions, and higher interestrates.DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US

9、 Disclosure: Creditto do in its As a be the a of of as a in Americas/United States Aerospace & DefenseRatingPrice(10-Jan-19, US$)40.63Targetprice(US$)(from 46.00) 43.00 52-week pricerange(US$)70.94 -36.76Market cap(US$ m)4,011BWX Technologies, Inc. (BWXT)Minor Model Maintenance; Reducing TargetPrice

10、Enterprise value(US$m)4,656 PriceTarget price is for 12 months.Research Analysts Our 2019/2020 estimates revise to $2.50/$2.77 on minor model maintenance.RobertSpingarn212 5381895 HYPERLINK mailto:robert.spingarn JoseCaiado212 3256771 HYPERLINK mailto:jose.caiado AudreyPreston212 3252709 HYPERLINK m

11、ailto:audrey.preston ScottDeuschle212 3256116 HYPERLINK mailto:scott.deuschle Our TP falls to $43 (from $46) as we migrate to PE valuation methodology. We value BWXT using a 15.5x multiple (7% premium to ex-pension peers) on 2020 earnings. Risks include budget risk, bizjet demand weakness, pricing p

12、ressure from DoD, execution.Shareprice performanceFinancial and valuationmetrics807060504030A p r- 18l -18O ct- 18Jan - 19BWXT.KS& P 5 0 0IN D EXOn 10-Jan-2019 the S&P 500 INDEX closed at 2596.64 Daily Jan10, 2018 - Jan10, 2019, 01/10/18 = US$61.23Quarterly EPSQ1Q2Q32017A0.550.560.46 2018E0.670.580.

13、40 2019E0.000.000.00 Year12/17A12/18E12/19E12/20EEPS (CSadj.)(US$)1.982.242.502.77Prev. EPS (US$)-2.492.75P/E rel. (%)105.7115.6111.3111.1Revenue(US$m)1,687.71,803.11,903.12,029.1EBITDA (US$ m)364.3343.3403.0439.8OCFPS (US$)2.211.493.143.40P/OCF(x)27.327.412.912.0EV/EBITDA(current)12.913.711.710.7Ne

14、t debt(US$m)306645622538ROIC(%)35.3123.4823.1424.27Number ofshares(m)98.73IC (current,US$m)591.28BV/share (Next Qtr.,US$)4.4EV/IC(x)4.3Net debt (Next Qtr.,US$m)Dividend(current,US$)Net debt/tot eq(NextQtr.,%)145.9Source: Company data, Thomson Reuters, Credit Suisse estimatesBWX Technologies, Inc. (B

15、WXT)Company BackgroundPrice (10 Jan 2019): US$40.63; Rating: NEUTRAL; Target Price: (from 46.00) 43.00; Analyst: Robert SpingarnCompany BackgroundIncome Statement12/17A12/18E12/19E12/20ERevenue(US$m)1,687.71,803.11,903.12,029.1EBITDA(US$ m)364343403440Depr.&amort.(57)(60)(76)(81)EBIT (US$)3083253483

16、73EBIT (US$)308325348373Netinterestexp(13)(25)(33)(33)PBT (US$)294291321351PBT (US$)294291321351ProfitProfitaftertax199225249272Reported netReported netincome(US$)199225249272Adjusted net income199225249272Cash FlowAdjusted net income199225249272Cash Flow12/17A12/18E12/19E12/20EEBIT308325348373Netin

17、terest(13)(25)(33)(33)Change inworkingcapital(107)(190)(24)(32)CAPEX(97)(150)(150)(84)Free cashflow tothefirm125(1)162249Acquisitions(1)(213)00Divestments0000BWX Technologies, Inc. manufactures and supplies nuclearcomponents and fuel. The company manages nuclear and national security operations. Its

18、 facilities offer heavy components, as well as nuclear components for Department of Energyprograms.Blue/Grey Sky ScenarioCash flowCash flowfrominvestments(91)(355)(142)(77)Our Blue SkyOur Blue SkyScenario (US$)(from 60.00)55.00We use a 20 x PE multiple on our 2020 estimates to arrive at our $55 blue

19、 sky valuation. In our Blue Sky scenario we assume greater than expected medical isotope revenue and a higher cadence in the Nuclear Operations group from a greater than expected appropriations for Virginia class submarines (3/year instead of Changes inNet Changes inNetCash/Debt94(339)2384 Balance S

20、heet (US$)12/17A12/18E12/19E12/20EAssetsCash & cash equivalents203140163247Total current assets873745802937Total assets1,7121,9062,0432,184LiabilitiesTotal current liabilities528489511540Total liabilities1,4271,4781,5001,530Total liabilities and equity1,7121,9062,0432,184 Netdebt306645622538 Per sha

21、re12/17A12/18E12/19E12/20ENo. of shares (wtd avg)1001009998CS adj. EPS1.982.242.502.77Prev. EPS (US$)-2.492.75Dividend (US$)0.000.000.000.00Our Grey Sky Scenario (US$)(from 34.00)28.00 Free cash flowpershare1.25(0.01)1.632.54 Our Grey Sky Scenario (US$)(from 34.00)28.00Salesgrowth(%)8.86.85.56.6EBIT

22、growth(%)28.95.46.97.4Net profitgrowth(%)8.413.310.59.3EPSgrowth(%)12.113.211.810.7EBITDA margin (%)21.619.021.221.7EBIT margin (%)18.318.018.318.4Pretax margin (%)17.416.116.917.3EV/Sales (x)2.562.582.432.24EV/EBITDA(x)12.913.711.710.7EV/EBIT(x)14.014.313.312.2P/E (x)20.518.116.214.7Price tobook(x)

23、14.39.57.46.1Earnings12/17A12/18E12/19E12/20EWe use a 10 x PE multiple on our 2020 estimates to arrive at our $28 grey sky valuation. In our grey Sky scenario we assume lower than expected medical isotope revenue, a loss on the savannah river contract protest, and lower than expected appropriations

24、for VirginiaEarnings12/17A12/18E12/19E12/20E class submarines (1/year instead of2/year)Net margin(%)Net margin(%)11.812.513.113.4Valuation12/17A12/18E12/19E12/20E80706050Asset turnover1.00.90.9Asset turnover1.0Returns12/17A12/18E12/19E12/20E30ROIC (%)35.323.523.124.3GearingROIC (%)35.323.523.124.3Ge

25、aring12/17A12/18E12/19E12/20ENetdebt/equity(%)106.9150.5114.682.2Quarterly EPSQ1Q2Q3Q4Interest coverageratio(X)22.913.310.511.5Quarterly EPSQ1Q2Q3Q42017A0.550.560.460.472018E0.670.580.400.59 2019E0.000.000.000.00 Source: Company data, Thomson Reuters, Credit Suisse estimatesApr- 18l -18Oct- 18Jan -

26、19BWXT.KS&P 500 INDEXOn 10-Jan-2019 the S&P 500 INDEX closed at 2596.64 Daily Jan11, 2018 - Jan10, 2019, 01/11/18 = US$62.23Americas/United States Computer Services & IT ConsultingRatingPrice(10-Jan-19, US$)148.55Targetprice(US$)(from 189.00) 168.00 52-week pricerange(US$)198.55 -137.35Market cap(US

27、$ m)3,691CACI International, Inc. (CACI)Reducing Target Pricepriceisfor12Enterprise value(US$ m)4,443 Our TP falls to $168 (from $189) as we lowerpriceisfor12ResearchAnalystsRobertSpingarn212 5381895 HYPERLINK mailto:robert.spingarn JoseCaiado212 3256771 HYPERLINK mailto:jose.caiado AudreyPreston212

28、 3252709 HYPERLINK mailto:audrey.preston ScottDeuschle212 3256116 HYPERLINK mailto:scott.deuschle revaluations within CACIs peer group. We value CACI using a 50-50 blended PE-FCF yield, using a 17x multiple on CY19 EPS and 7.5% FCF yield on CY19 FCF. This is in-line with peers. Risks include budget

29、risk, bizjet demand weakness, pricing pressure from DoD,execution.Year6/18A6/19E6/20EYear6/18A6/19E6/20E6/21EEPS (CS adj.) (US$)8.2710.0810.6811.42Prev. EPS (US$)-P/E rel. (%)92.593.995.498.6Revenue (US$ m)4,467.94,816.65,028.05,210.6EBITDA (US$ m)412.9451.3480.2505.4Apr18l - 1 8O ct- 18Jan -19OCFPS

30、(US$)12.8713.6914.7715.18P/OCF (x)13.110.910.19.8CACI.NS& P5 00 INDEXEV/EBITDA (current)7.499675241261n10,2018 -Jan10,19,/10/18=US$137.7ROIC(%)11.079.4910.0710.922 001 801 601 401 20Financial and valuationmetricsOn 10-Jan-2019 the S&P 500 INDEX closed at 2596.64 Daily JaQuarterly EPSQ1Q2Q32018A1.672

31、.002.56 2019E-2020E-Net debt (US$ m)Number ofshares(m)24.85Price/Sales(x)0.81BV/share (Next Qtr.,US$)-P/BVPS(x)1.7Net debt (Next Qtr.,US$m)-Dividend(current,US$)Dividendyield(%)-Source: Company data, Thomson Reuters, Credit Suisse estimatesCACI International, Inc. (CACI)Income Statement6/18A6/19E6/2

32、0E6/21ERevenue (US$ m)4,467.94,816.65,028.05,210.6SalesIncome Statement6/18A6/19E6/20E6/21ERevenue (US$ m)4,467.94,816.65,028.05,210.6Sales4,467.94,816.65,028.05,210.6EBITDA412.9451.3480.2505.4Operating profit340.7371.8397.2422.1Recurring profit298.7327.3357.2382.1Cash Flow6/18A6/19E6/20E6/21ECash f

33、low from operations325348375386CAPEX(42)(43)(35)(35)Free cashflow to the firm284305340351Cash flow from investments(118)(43)(35)(35)Net share issue(/repurchase)(0)000Dividends paid0000Issuance (retirement) of debt(185)(100)(100)(100)Other(21)000Cashflow from financing activities(207)(100)(100)(100)E

34、ffect of exchange rates0000Changes in Net Cash/Debt170244340351Net debt at end99675241261Balance Sheet ($US)6/18A6/19E6/20E6/21EAssetsOther current assets58899396Total current assets9311,1761,4421,727Total assets4,0344,1834,4844,804LiabilitiesShort-term debt0000Total current liabilities539580710839L

35、ong-term debt1,015915815715Total liabilities1,9271,8691,8981,928Shareholder equity2,1072,3142,5862,876Total liabilities and equity4,0344,1834,4844,804Net debt99675241261Per share6/18A6/19E6/20E6/21ENo. of shares (wtd avg)25252525CS adj. EPS8.2710.0810.6811.42Prev. EPS (US$)-Dividend (US$)0.000.000.0

36、00.00Company BackgroundCompany BackgroundCACI International Inc. (CACI), along with its wholly owned subsidiaries and joint ventures, is an international information systems, high technology services, and professional services corporation.Blue/Grey Sky ScenarioOur Blue SkyOur Blue SkyScenario (US$)2

37、12.00 Free cash flowpershare11.2312.0013.3913.81 Our BS valuation of $212 assumes a target FCF yield of 5.0% and a P/E multiple of 20.0 x, driven by higher-than-expected defense spending and initiatives by the Administration to outsource more work to private industry. Further, the market becomes mor

38、e comfortable that key changes to the topline strategy can in fact drive 30bps of annual margin expansionsustainably.Earnings6/18A6/19E6/20E6/21EOur GEarnings6/18A6/19E6/20E6/21EOur GSales growth (%)3.6Our GrEBIT growth (%)6.3Net profit growth (%)27.6the tarEPS growth (%)26.7bedrivEBITDA margin (%)9

39、.7inabilitEBIT margin (%)8.1evenPretax margin (%)7.3from sNet margin(%)5.6 value, Valuation6/18A6/19E6/20E6/21EEV/Sales (x)1.050.920.820.72EV/EBIT (x)13.811.910.38.9 P/E (x)18.014.713.913.02 00y to expand margins as competitive pressures remain and intensify, and a shift in customer acquisition stra

40、tegy away olutions and managed services and back towards lowest-cost-pluswork.Share price performanceQuarterly EPSQ1Q2Q3Q42018A1.672.002.562.052019E- 2020E- 1 801 601 401 20Apr- 18l -18Oct- 18Jan - 19CACI.NS& P 5 0 0 IND EXOn 10-Jan-2019 the S&P 500 INDEX closed at 2596.64 Daily Jan11, 2018 - Jan10,

41、 2019, 01/11/18 = US$141.35Source: Company data, Thomson Reuters, Credit Suisse estimatesAmericas/United States Aerospace & DefenseRatingPrice(10-Jan-19, US$)162.43Targetprice(US$)(from 216.00) 190.00 52-week pricerange(US$)229.95 -148.21Market cap(US$ m)48,104General Dynamics Corporation (GD)Minor

42、Model Maintenance, Reducing TargetPriceEnterprise value(US$m)56,839 PriceTarget price is for 12 months.ResearchAnalystsRobertSpingarn212 5381895 HYPERLINK mailto:robert.spingarn JoseCaiado212 3256771 HYPERLINK mailto:jose.caiado AudreyPreston212 3252709 HYPERLINK mailto:audrey.preston ScottDeuschle2

43、12 3256116 HYPERLINK mailto:scott.deuschle Our 2018/2019/2020 estimates revise to $11.13/$11.77/13.58, largely on higher estimates for net interest expense. Our TP falls to $190 (from $216) as we migrate to PE valuation methodology. We value GD using a 14x multiple (5% discount to ex-pension peers)

44、on 2020 earnings. Risks include budget risk, bizjet demand weakness, pricing pressure from DoD,execution.Share priceperformance2 402 202 001 801 601 40A p r- 18l -18O ct- 18Jan - 19GD.NS& P 5 0 0IN D EXOn 10-Jan-2019 the S&P 500 INDEX closed at 2596.64 Daily Jan10, 2018 - Jan10, 2019, 01/10/18 = US$

45、204.75Quarterly EPSQ1Q2Q3Q42017A2.482.452.56 2.502018E2.652.622.89 2.972019E-Financial and valuationmetricsYear12/17A12/18E12/19E12/20EEPS (CSadj.)(US$)9.4911.1311.7713.58Prev. EPS (US$)-11.1512.1614.06P/E rel. (%)88.193.094.790.7Revenue(US$m)29,887.036,218.039,030.141,351.9EBITDA (US$ m)4,477.05,12

46、8.55,451.85,966.1OCFPS (US$)12.2814.4314.2915.30P/OCF(x)16.611.311.410.6EV/EBITDA(current)13.511.811.110.1Net debt(US$m)9998,7367,6986,347ROIC(%)22.8516.6417.1818.71Number ofshares(m)296.15IC (current,US$m)BV/share (Next Qtr.,US$)42.6EV/IC(x)2.4Net debt (Next Qtr.,US$m)11,990.0Dividend(current, US$)

47、3.72Net debt/tot eq(NextQtr.,%)94.0Source: Company data, Thomson Reuters, Credit Suisse estimatesGeneral Dynamics Corporation (GD)Income Statement12/17A12/18E12/19E12/20ERevenue (US$ m)29,887.036,218.039,030.141,351.9EBITDA (US$ m)Income Statement12/17A12/18E12/19E12/20ERevenue (US$ m)29,887.036,218

48、.039,030.141,351.9EBITDA (US$ m)4,4775,1285,4525,966Depr. & amort.(441)(674)(772)(803)EBIT (US$)4,0364,4544,6805,163Net interest exp(103)(355)(378)(313)PBT (US$)3,9364,0744,3024,850Income taxes(1,165)(737)(839)(946)Profit after tax2,7713,3373,4633,905Minorities-Reported net income (US$)2,8903,3373,4

49、633,905Other NPAT adjustments0000Adjusted net income2,8903,3373,4633,905Cash Flow12/17A12/18E12/19E12/20EEBIT4,0364,4544,6805,163Net interest(103)(355)(378)(313)Change in working capital(443)72(159)(386)CAPEX(428)(616)(742)(786)Free cashflow to the firm3,3103,7123,4643,616Acquisitions(399)(10,039)00

50、Divestments-Cash flow from investments(791)(10,486)(742)(786) Changes inNetCash/Debt555(7,737)1,0381,351 Balance Sheet (US$)12/17A12/18E12/19E12/20EAssetsCash & cash equivalents2,9834,4603,8262,677Total current assets18,27620,85420,78020,179Total assets34,99438,66340,09939,401LiabilitiesTotal curren

51、t liabilities13,04713,97016,86917,532Total liabilities23,55925,47025,86923,532Total liabilities and equity34,99438,66340,09939,401 Netdebt9998,7367,6986,347 Per share12/17A12/18E12/19E12/20ENo. of shares (wtd avg)305300294288CS adj. EPS9.4911.1311.7713.58Prev. EPS (US$)-11.1512.1614.06Dividend (US$)

52、3.273.634.004.40Company BackgroundCompany BackgroundGeneral Dynamics Corporation offers a portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; military and commercial shipbuilding, and communications and informationtechnology.Blue/Grey Sky Scenario

53、Our Blue SkyOur Blue SkyScenario (US$)(from 239.00)238.00 Free cash flowpershare10.8712.3811.7712.57 Our Blue Sky valuation of $238 assumes P/E can re-rate to 17.5x, driven by better than expected cost synergies from the CSRA acquisition, greater than expected increases in funding for Naval shipbuil

54、ding, continued strong international demand for combat systems, better than expected performance at GD Marine, and greater than expected demand for Gulfstreams new G500/600 bizjets.Our Grey Sky Scenario (US$)(from 146.00) 109.00 Our Grey Sky valuation scenario of $109 assumes that P/E re-rates to 8.

55、0 x as a result of worse-than-expected defense budget outcomes, namely the Navys ability to execute some of its planned production rate increases, and Army modernization plans go back on hold given other budget priorities. The large-cabin business jet market deteriorates again (or competition increa

56、ses) requiringdeep discounting and/or productioncuts.Share price performanceEarnings12/17A12/18E12/19E12/20EEarnings12/17A12/18E12/19E12/20ESales growth (%)(2.2)EBIT growth (%)10.3Net profit growth (%)12.7EPS growth (%)18.417.35.715.4EBITDA margin (%)15.014.214.014.4EBIT margin (%)13.512.312.012.5Pr

57、etax margin (%)11.7Net margin(%)9.4Valuation12/17A12/18E12/19E12/20EEV/Sales (x)1.641.571.431.32EV/EBITDA (x)13.511.811.110.1EV/EBIT (x)12.212.811.910.5P/E (x)17.114.613.812.0Price to book (x)2.9Asset turnover1.0Returns12/17A12/18E12/19E12/20EROE stated-return on (%)26.627.125.325.9ROIC (%)22.916.61

58、7.218.7Gearing12/17A12/18E12/19E12/20ENet debt/equity (%)8.7Interest coverage ratio (X)39.212.512.416.5Quarterly EPSQ1Q2Q3Q42017A2.482.452.562.502018E2.652.622.892.972 202 001 801 601 40Apr- 18l -18Oct- 18Jan - 19GD.NS& P 5 0 0 IND EX 2019E- On 10-Jan-2019 the S&P 500 INDEX closed at 2596.64 Daily J

59、an10, 2018 - Jan10, 2019, 01/10/18 = US$204.75Source: Company data, Thomson Reuters, Credit Suisse estimatesAmericas/United States Aerospace & DefenseRatingPrice(10-Jan-19, US$)134.89Targetprice(US$)(from 209.00) 176.00 52-week pricerange(US$)173.53 -127.26Market cap(US$ m)15,871Harris Corporation (

60、HRS)Minor Model Maintenance; Reducing TargetPriceEnterprise value(US$m)18,752 PriceTarget price is for 12 months.Research Analysts Our 19/20/21 EPS estimates revise to $7.94/$9.11/$10.33 on minor modelRobertSpingarn212 5381895 HYPERLINK mailto:robert.spingarn JoseCaiado212 3256771 HYPERLINK mailto:j