Mercury Systems downgraded to Neutral from Overweight at JPMorgan

JPMorgan analyst Seth Seifman downgraded Mercury Systems to Neutral from Overweight with a price target of $37, down from $56. The analyst’s “remaining hope” for Mercury’s turnaround story was a sale of the company. However, Mercury was unable to find a buyer, announcing the end of its strategic review on Friday afternoon, along with CEO Mark Aslett’s resignation and a search for a new CEO, the analyst tells investors in a research note. The firm says the stock may be down further on the news. While this could provide an opportunity, either for a quick trade or for the long term if a new CEO can re-establish Mercury’s value proposition to the market, without a clearer sense of the path forward or the outlook for sales, profitability, and cash flow, a downgrade is warranted, contends JPMorgan.