By: Carter Copeland
GD’s proposed acquisition of Fed IT provider CSRA came as a bit of a shock this morning. Few seem enamored by the deal and we attribute the day’s weakness primarily to unexpected thesis creep as a clean balance sheet/business jet demand acceleration trade is being diluted with more Federal IT exposure. We view CSRA as a low-risk, average return investment. With shares trading at ~15x our pro-forma 2019 estimate, we’re still bullish.