Jefferies analyst Greg Konrad upgraded Aerojet Rocketdyne (AJRD) to Buy from Hold with a price target of $57, up from $43, as he sees 2020 growth accelerating to 5% due to strong support from flagship programs such as GMLRS, PAC-3, THAAD, and Standard Missile and limited headwinds from the space portfolio. Aerojet was named to Northrop Grumman (NOC) GBSD team, which eliminated a potential risk, and a number of hypersonic opportunities appear to be accelerating, Konrad added.

Says "pleased with cash performance" in Q1. Expects strong cash generation in Q2. Says "committed" to "strong and growing dividend." Remains "upbeat" on long-term prospects.

Says strong global defense budget outlook; broad portfolio well aligned to customer priorities; robust long-term cash flow outlook. Expects greater than $2B in share repurchases in 2024. Says "laser focused" on performance, driving cost efficiencies in the business. Comments taken from Q1 earnings conference call.

For 2024 sees: Aeronautics Systems sales mid $11B, OM rate mid 9%; Defense Systems sales ~ $6B, OM rate low to mid 12%; Missions Systems sales low to mid $11B, OM rate high 14%; Space Systems sales low to mid $14B, OM rate ~9%; Eliminations ~($2.3B), OM rate high 13%. Prior view: Aeronautics Systems sales low $11B, OM rate mid 9%; Defense Systems sales ~ $6B, OM rate low 12%; Missions Systems sales low to mid $11B, OM rate ~ 15%; Space Systems sales mid to high $14B, OM rate ~9%; Eliminations ~($2.3B), OM rate high 13%. Comments taken from investor presentation slides. Comments taken from investor presentation slides.

Backs FY24 free cash flow view $2.25B-$2.65B.

FY24 consensus $24.65. Backs FY24 revenue view $40.8B-$41.2B, consensus $41.11B.