TD Cowen analyst Gautam Khanna maintained a Hold rating on Leidos Holdings (LDOS – Research Report) today and set a price target of $165.00.
Gautam Khanna has given his Hold rating due to a combination of factors influencing Leidos Holdings’ performance. The company demonstrated strong results in its Health/Civil segment, with sales growth surpassing expectations and a significant margin improvement. This positive outcome was a key driver in exceeding earnings projections for the quarter. However, despite these strengths, there are concerns about the sustainability of this performance, especially considering less favorable contract terms and potential bottlenecks in the medical exam business.
Another factor contributing to the Hold rating is the minimal impact from DOGE, which represents a small portion of Leidos’ overall sales. Additionally, while the company maintained its sales guidance, there are indications that achieving the higher end of this range may be challenging due to slower contract award processes. Although there is potential for margin improvement, these uncertainties lead to a cautious outlook, justifying the Hold recommendation.
In another report released today, UBS also maintained a Hold rating on the stock with a $168.00 price target.