BOSTON - Teledyne FLIR Defense, a subsidiary of Teledyne Technologies Incorporated (NYSE:TDY), a $21.27 billion market cap company with robust financials and a 43.18% gross margin, has been awarded a contract to supply the United States Coast Guard (USCG) with advanced imaging surveillance systems. According to InvestingPro analysis, the company maintains strong financial health with a "GOOD" overall rating, suggesting solid operational stability. The five-year Indefinite Delivery Indefinite Quantity (IDIQ) contract, valued at up to $74.2 million, will support various USCG missions, particularly search and rescue operations.
Under the terms of the contract, Teledyne FLIR Defense will provide more than 125 Electro-Optic Sensor System-Modernized (ESS-M) units. These systems are designed for use on USCG rotary wing aircraft, including the MH-60 and MH-65 helicopters. The ESS-M boasts a high-definition sensor suite capable of capturing imagery in daylight, low light, and infrared. Additionally, it features updated user interfaces, enhanced processing capabilities, and software improvements to facilitate future upgrades.
The ESS-M systems will assist the USCG in a broad range of critical missions, from living marine resources protection to law enforcement. They are also expected to enhance coastal security and contribute to efforts in drug and migrant interdiction, as well as safeguarding ports and waterways. With a healthy current ratio of 2.0 and trading at a P/E ratio of 22.84, InvestingPro data shows Teledyne is currently trading near its Fair Value, suggesting balanced market pricing. Investors seeking deeper insights can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Teledyne FLIR Defense has a long-standing relationship with the USCG, having supplied and supported legacy ESS systems for the service's medium- and short-range recovery aircraft since 2005. Dr. JihFen Lei, president of Teledyne FLIR Defense, expressed pride in the company's ongoing support of the Coast Guard and its commitment to maintaining cutting-edge technology for maritime operations.
The delivery of the ESS-M systems is scheduled to commence in the fourth quarter of 2025. This contract underscores Teledyne FLIR Defense's role as a key provider of advanced surveillance solutions for military and public safety applications. With the company's next earnings report due on January 22, 2025, investors can gain additional insights into the company's performance through InvestingPro's extensive financial metrics and analysis tools. The company has been a prominent figure in the defense sector for over 45 years, specializing in thermal imaging and sophisticated sensor systems for air, land, and maritime use.
This news is based on a press release statement from Teledyne FLIR Defense.
In other recent news, Teledyne Technologies Incorporated has been making significant strides, with financial firms UBS, TD Cowen, BofA Securities, and Jefferies all issuing or maintaining Buy ratings on the company. UBS resumed coverage on Teledyne, predicting a rebound in short cycle activity in 2025, and set a price target of $585. TD Cowen highlighted Teledyne's high-margin opportunities in sensing and imaging, maintaining a price target of $500. BofA Securities upgraded Teledyne's stock rating from Neutral to Buy, increasing the price target to $550, citing expected recovery in the Digital Imaging segment. Lastly, Jefferies increased its price target for Teledyne to $550, expecting a revenue and earnings per share inflection point by 2025.
Teledyne has also been actively pursuing mergers and acquisitions, recently announcing an agreement to purchase select aerospace and defense electronics businesses from Excelitas Technologies Corp. for $710 million. This acquisition is expected to enhance Teledyne's portfolio with advanced optics used in various military applications and high-voltage semiconductor switches.
In terms of earnings and revenue, Teledyne reported record sales in its Q3 2024 earnings call, largely driven by high demand in the defense, space, and energy sectors. Despite a slight decrease in Digital Imaging sales, the company's financial performance remains robust, with $354 million in stock repurchases and a record backlog due to orders surpassing sales for the fourth consecutive quarter. The company anticipates modest sequential sales growth in Q4 2024 and has provided a cautious revenue estimate of $5.624 billion for the year amid global uncertainties.
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