TSA removing naked scanners; OSI shares jump

January 18, 2013, 2:07 PM

The Transportation Security Agency has pulled the plug on its contract with OSI systems for controversial airport scanners that generated nude images of travelers.

Or, as the TSA puts it: “Due to its inability to deploy non-imaging Automated Target Recognition (ATR) software by the Congressionally-mandated June 2013 deadline, TSA has terminated its contract with Rapiscan.”

Shares of OSI Systems are up around 5% following the announcement late Thursday

Link…

http://blogs.marketwatch.com/thetell/2013/01/18/tsa-removing-naked-scanners-osi-shares-jump/

 

Analyst Jeff Martin at Roth Capital Partners called the decision positive for the stock because it removes an overhang on the shares. “We view the announcement as a positive catalyst for shares, although recent strength in the stock suggests this was somewhat anticipated,” said in a research note. Martin reiterated a buy rating and $93 price target on the shares.

Analyst Tim Quillin at Stephens Inc. also views the decision as positive. “Body scanners are not a meaningful revenue contributor for OSIS and this news resolved an issue that took the stock down about 33%  in mid-November,” he said in emailed comments.

– Tom Bemis

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