Maxar Plunges 25% On 3Q Sales Miss; Street Sees 38% Upside

Shares of Maxar Technologies plunged 24.5% on Friday after the company reported weaker-than-expected 3Q sales results. The space technology company’s revenues increased 5.6% year-on-year to $436 million but fell short of analysts’ expectations of $453.7 million.

Maxar Technologies’ (MAXR) 3Q earnings of $1.34 per share flipped from a loss of $0.42 per share in the year-ago quarter. The company’s CFO Biggs Porter said, “Performance in the quarter was solid, with both year-over-year revenue and profit growth on a consolidated basis and positive free cash flow. While the existence of the COVID pandemic remains a risk to our operations and the operations of our customers, we have thus far been able to manage the crisis roughly in line with expectations.”

Maxar slightly tweaked its revenue outlook for the full-year 2020. The company now projects 2020 revenues to stay flat or increase modestly, compared to its previous projection of flat to mid-single-digit increase. (See MAXR stock analysis on TipRanks).

Ahead of its earnings release, on Oct. 29, Maxar declared a quarterly cash dividend of a penny to be payable on Dec. 31 to shareholders of record date as of Dec. 15. At Friday’s closing price of $21.56, the stock’s dividend yield lands at 0.19%.

RBC Capital analyst Steve Arthur raised the stock’s price target on Sept. 29 to $30 (39.2% upside potential) from $25 and reiterated a Buy rating. In a note to investors, Arthur said that Maxar’s risk-reward remains positive despite the stock’s impressive year-to-date upside movement. The analyst noted that the company has a large backlog with recurring contract base and has managed to mitigate risks and maintained “solid” operations during the COVID-19 pandemic-led business disruptions.

Currently, the Street has a cautiously optimistic outlook on the stock with a Moderate Buy analyst consensus. With shares up nearly 37.6% year-to-date, the average price target of $29.67 implies further upside potential of about 37.6% to current levels.