Saab (OTCMKTS:SAABY) Shares Gap Up - Still a Buy?

Key Points

• Saab shares gapped up ahead of trading, opening at $29.10 after closing at $27.12 and later trading around $29.42, reflecting a strong reaction to the latest news.
• The company reported second-quarter operating profit above expectations, with sales and order bookings rising sharply as defense demand remained strong.
• Saab said its order backlog hit a record and it reaffirmed medium-term guidance, signaling continued confidence in future revenue growth and defense demand.

Saab AB - Unsponsored ADR (OTCMKTS:SAABY - Get Free Report) shares gapped up prior to trading on Friday . The stock had previously closed at $27.12, but opened at $29.1001. Saab shares last traded at $29.42, with a volume of 4,860 shares trading hands.

Key Stories Impacting Saab

Here are the key news stories impacting Saab this week:

• Positive Sentiment: Saab reported second-quarter operating profit that beat forecasts, with sales and order bookings rising sharply as defense demand remained strong. Reuters article
• Positive Sentiment: The company said its order backlog reached a record level, reflecting a fifth straight quarter of growth in the order book and supporting revenue visibility. CNBC article
• Positive Sentiment: Saab backed its medium-term guidance after recently signing several large orders, signaling confidence that demand momentum will continue. Wall Street Journal article
• Positive Sentiment: The company received additional government-related business, including an order to equip German Navy frigates and supply combat systems and sensors for new warships, which adds to future revenue. AOL article
• Neutral Sentiment: Management also said it is considering extra GlobalEye production sites as orders increase, which points to expanding capacity but does not yet change earnings by itself. Aviation Week article
• Neutral Sentiment: CEO comments about Europe needing joint defense procurement and industry partnerships highlight the broader demand backdrop, but they are more strategic than immediately financial. CNBC video

Analysts Set New Price Targets

A number of brokerages have recently issued reports on SAABY. Pareto Securities raised Saab from a "hold" rating to a "strong-buy" rating in a research report on Thursday, June 25th. Citigroup raised Saab from a "strong sell" rating to a "hold" rating in a research report on Monday, May 18th. One investment analyst has rated the stock with a Strong Buy rating, one has given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, Saab currently has an average rating of "Hold".

Saab Stock Up 10.3%

The stock has a market capitalization of $31.41 billion, a PE ratio of 37.62 and a beta of -0.09. The company has a current ratio of 1.28, a quick ratio of 0.84 and a debt-to-equity ratio of 0.29. The company's 50-day moving average is $27.67 and its 200 day moving average is $32.32.

Saab (OTCMKTS:SAABY - Get Free Report) last released its earnings results on Friday, July 17th. The company reported $0.21 EPS for the quarter. Saab had a net margin of 7.87% and a return on equity of 15.43%.

Saab Company Profile

Saab AB is a Sweden-based aerospace and defense company that develops, manufactures and supplies products, services and solutions for military and civil security markets. Founded in 1937 as an aircraft manufacturer, the company has diversified into areas including combat aircraft, airborne surveillance, radar and sensor systems, missiles and weapons, naval vessels and underwater systems, as well as command-and-control, training and simulation and cybersecurity solutions.

In aeronautics, Saab is best known for its Gripen family of multi-role fighter aircraft and for airborne surveillance solutions that integrate radars and sensors.

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