Stanley shares gain after analyst upgrade

Shares of government information technology contractor Stanley Inc. rose Monday after an analyst upgraded the stock to "Strong Buy" from "Outperform" on prospects for growing revenue.

Raymond James analyst Brian Gesuale said he expects that "contract wins will accelerate sharply, the passport business will improve significantly, and organic growth should gather momentum."

Arlington, Va.-based Stanley, which provides systems integration and professional services for the federal government, has more than $1.5 billion of bids submitted, up from $1 billion at quarter's end, and its historical win-rate is in the mid-50 percent range, he said.

One big contributor to Stanley's growing revenue will be Manassas, Va.-based Oberon Associates Inc., an engineering, intelligence operations and information technology services provider that Stanley bought last September for about $170 million, the analyst wrote in a client note.

Further, Gesuale noted that Stanley's stock is down 28 percent, year-to-date, and has underperformed the peer group and broader markets.

"We see this pattern reversing in the near term," he said.

In midday trading, Stanley shares rose $1.78, or 6.8 percent, to $27.87.