Shares of Costa Mesa’s Ceradyne Inc. rose more than 5% Friday after an upgrade from a Friedman Billings Ramsey analyst who thinks its ceramic military armor will stay in favor with the Pentagon.
The Arlington, Va.-based brokerage’s Brian Butler lifted his rating to “outperform” from “market perform,” with the expectation that orders for its bulletproof vests would pick up in the coming months
About $2.2 billion is expected to flow into the company through the government’s fiscal year, the analyst said.
“The Department of Defense plans to include body armor in the 2010 budget as a separate line item,” he said. “his demonstrates the DOD’s commitment to the program.”
Butler said he believes the company will keep its 60% market share for the ceramic armor worn by ground troops in Iraq and Afghanistan.
Shares of Ceradyne were up more than 7% at close of trading, giving it a market value of nearly $960 million.
Earlier in the week Ceradyne said it would buy North Billerica, Mass.-based SemEquip Inc. for $125 million.
SemEquip makes equipment used in the production of semiconductors. The deal is slated to close in the third quarter.
Ceradyne has been trying to branch out into other areas of business other than its military sales, which made up 63% of its $188 million in first-quarter sales.
It’s stock is off about 60% from its high last summer, when investors began to fear it had reached a peak in for its armor.
