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Raven's (RAVN) Aerostar Gets Balloon Systems Contract From DoD

Raven Industries, Inc. RAVN yesterday received a contract from the U.S. Department of Defense’s (“DoD”) organization Defense Innovation Unit (“DIU”). The financial terms of the contract have not been disclosed.

In the last trading session, shares of Raven reflected no change in price, closing at $57.82.

Raven is based in Sioux Falls, SD and is one of the leading companies engaged in providing precision agriculture technology. It has three divisions — Aerostar, Engineered Films and Applied Technology. Its revenues totaled $348.4 million in the 12 months ended Jan 31, 2021.

Inside the Headlines

As noted, the DIU contract will be accomplished by Aerostar Technical Solutions, Inc. Aerostar will provide stratospheric balloon systems to the DoD, enhancing the defense organization’s high-altitude capabilities. Aerostar will also focus on providing related services for the balloon systems.

Aerostar will work on its Thunderhead Balloon Systems to try and integrate the operational needs of the DoD. After working on specific needs, the prototype demonstration will help the defense department evaluate Aerostar’s technology utility for its use.

It is worth mentioning here that Thunderhead Balloon Systems features multiple sensors, technologies and payloads during its flight. Collections of data will be a lot easier for the defense department from such high-altitude balloons. Also, this balloon system of Aerostar can be used for commercial and scientific research applications.

In September 2021, Raven announced that its stratospheric balloon systems can be used for wildfire management. Monitoring of active wildfires through sensors and cameras on the stratospheric balloons can help protect lives, natural resources and homes.

Zacks Rank, Price Performance and Estimates

With a market capitalization of $2.1 billion, Raven currently carries a Zacks Rank #3 (Hold). Solid growth in end markets, contract wins and acquired assets are beneficial for the company. However, global supply-chain woes are concerning.

In September, Raven received a go ahead for its deal with CNH Industrial N.V. CNHI. The agreement was signed between the parties in June 2021 and calls for the buyout of Raven by CNH Industrial. The transaction was valued at $58 per share or $2.1 billion enterprise value and will be funded by CNH Industrial with available cash.

The completion of the transaction is expected in the fourth quarter of 2021. For more information about the aforementioned deal, please read: Raven Shareholders Approve Deal With CNH Industrial

In the past three months, shares of the company have decreased 0.8% compared with the industry’s decline of 9%.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Raven’s earnings is pegged at 82 cents per share for fiscal 2022 (ending January 2022) and $1.21 for fiscal 2023 (ending January 2023), indicating no change from the respective 60-day-ago figures. Earnings estimates for the third quarter of fiscal 2022 (ended October 2021, results are awaited) are unchanged at 21 cents.

Raven Industries, Inc. Price and Consensus

Raven Industries, Inc. price-consensus-chart | Raven Industries, Inc. Quote

Better-Ranked Stocks

Below we discuss two better-ranked companies in the industry.

Carlisle Companies Incorporated CSL presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last reported quarter was 9.52% and that in the last four quarters was 38.89%, on average.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

In the past 60 days, Carlisle Companies' earnings estimates have increased 0.4% for 2021 and 4.9% for 2022. Its shares gained 15.3% in the past three months.

Crane Co. CR reported better-than-expected results in the last reported quarter, with earnings surpassing estimates by 37.96%. Its earnings surprise in the last four quarters was 22.02%, on average. The company presently carries a Zacks Rank #2.

Crane's earnings estimates increased 4.9% for 2021 and 3% for 2022 in the past 60 days. Its shares grew 5% in the past three months.

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Raven Industries, Inc. (RAVN): Free Stock Analysis Report
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Crane Co. (CR): Free Stock Analysis Report
CNH Industrial N.V. (CNHI): Free Stock Analysis Report
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