Mercury Systems downgraded to Hold on technical risks at Truist

Truist downgraded Mercury Systems to Hold from Buy with a price target of $28, down from $48. The company’s fiscal Q2 results were weak and the fiscal 2024 updated guidance was worse as revenue at the midpoint were cut by 15%, the analyst tells investors in a research note. The firm says that while risk on challenged programs is being retired, technological obstacles have resulted in lower volumes. It believes technical risks will persist into fiscal 2025 and reduced estimates. Truist sees Mercury’s operational uncertainty persisting over the next nine months and finds it hard to continue to support the shares.