Mercury Systems (NASDAQ:MRCY) shares tumbled Monday after the company said board member Bill Ballhaus will take the role of its interim president and CEO, effective Saturday, and that it has decided against selling the company.
The aerospace and defense company revealed that after discussions, "The proposals ultimately received did not yield options for a sale that would reflect the intrinsic value of the company."
Reacting to the news, JPMorgan analysts downgraded MRCY to Neutral from Overweight, cutting the firm's price target on the stock to $37 from $56 per share.
"Our remaining hope for the Mercury turnaround story was a sale of the company, but it takes two to tango and Mercury was unable to find a buyer, announcing the end of its strategic review on Friday afternoon, along with CEO Mark Aslett's resignation and a search for a new CEO," said the analysts.
"The stock may be down further on this news and this could provide an opportunity, either for a quick trade if it overshoots to the downside or for the long term if a new CEO can re-establish Mercury's value proposition to the market," they added.
MRCY shares are currently down more than 11%, trading below the $31 mark after hitting a low of $28.88 earlier in the day.