Leidos Holdings, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Gavin Parsons from UBS maintained a Hold rating on the stock and has a $209.00 price target.
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Gavin Parsons has given his Hold rating due to a combination of factors impacting Leidos Holdings. While there is potential for increased revenue from the VBA segment as exam volumes rise, the overall Health & Civil segment has experienced flat revenue growth over the past year. This stagnation is partly due to a significant reduction in post-exam claims, which has not yet translated into a substantial increase in revenue.
Additionally, while VBA obligations have surged, the non-VBA Health & Civil obligations have declined, which could counterbalance the potential gains from the VBA segment. Parsons also notes that while there is room for margin improvement in the short term, there is a risk of margin pressure when current contracts are up for recompete in 2027. These mixed signals contribute to the Hold rating, as the potential upside is tempered by existing risks and uncertainties.