Shares of L-1 Identity Solutions Inc. jumped Friday as an analyst upgraded the producer of identification credentials due in part to the possibility of new contracts.
Analyst Brian Gesuale of Raymond James upgraded the Stamford, Conn., company to "Outperform" from "Market Perform" on easing debt concerns, increased business following the U.S. troop surge in Afghanistan and other factors.
L-1 Identity Solutions should benefit from a gradual improvement in its cash flow beginning in the second half of 2010 and the easing of "leverage concerns" in 2010, he said in a client note.
In addition, Gesuale said he believes the company will begin to receive high-margin orders over the next year in support of the additional 30,000 troops being ordered up by President Barack Obama.
He set an $8 price target, which implies a 34 percent premium over L-1 Identity Solution's $5.99 closing price Thursday.
Shares rose 32 cents, or 5.3 percent, to $6.31 in midday trading.