Leidos price target raised to $138 from $125 at Stifel

Stifel raised the firm’s price target on Leidos to $138 from $125 and keeps a Buy rating on the shares following quarterly results. Management guided 2024 better-than-expected on adjusted EPS on a better margin profile and lower taxes with the sales range of $15.7-16.1B and cash from ops of $1.1B roughly in line with expectations, particularly given the company noted “conservatism built around budget uncertainties.” Leidos has committed to promises made, promises delivered philosophy since Tom Bell joined as CEO, so the firm sees this guidance as a starting not an ending point for the year, absent any surprises on the budget front. Stifel remains positive on Leidos as fundamentals continue to show improvement and when accounting for a low net leverage profile that should allow greater capital returns to shareholders.