Leidos Holdings Receives Price Target Upgrade from Stifel Amid Strong Financial Performance
On Tuesday, Stifel announced an upgrade in its price target for Leidos Holdings (NYSE: LDOS), setting it at $138, up from the previously set target of $125. This adjustment comes on the heels of the company’s impressive fourth-quarter earnings, which not only surpassed consensus estimates but also exceeded Stifel’s projections. Leidos Holdings reported an adjusted EPS of $1.99, surpassing the anticipated $1.74 and Stifel’s forecast of $1.77.
Leidos’ financial health looks promising as the company offered an optimistic guidance for 2024. The company predicts an adjusted EPS to fall between $7.50 and $7.90, outshining the market’s expectation of $7.61. This upbeat forecast is attributed to an expected enhancement in margin profiles and favorable tax rates. Moreover, Leidos anticipates its sales to range between $15.7 to $16.1 billion, with cash from operations mounting to around $1.1 billion, aligning with current market anticipations.
A closer look at the company’s financial metrics reveals a solid market capitalization of $16.55 billion, indicating robust market presence. Despite a high P/E ratio of 112.05, the adjusted P/E ratio for the last twelve months, as of Q3 2023, stands at a more reasonable 23.13, suggesting a more favorable valuation upon adjustment for forecasted earnings.
Investing in Leidos Holdings appears even more attractive considering its consistent dividend payouts. The company has successfully raised its dividend for 5 consecutive years, with a dividend yield of 1.33% and a growth rate of 5.56% over the last twelve months as of Q3 2023. This reflects the company’s commitment to providing stable income to its shareholders and underlines its financial robustness.
The firm positions itself as a key player in the Professional Services industry, characterized by consistent profitability and a solid growth trajectory. This operational efficiency and industry strength further solidify Leidos’ competitive edge in the market.
Stifel’s analysts highlight that under the leadership of CEO Tom Bell, Leidos has adhered to a “promises made, promises delivered” philosophy, indicating that the current guidance could be the foundation for even greater achievements in the absence of budgetary surprises.
Investors and analysts alike are closely monitoring Leidos Holdings, considering the potential for increased capital returns to shareholders given the company’s improving fundamentals and low net leverage profile. With the company’s strong performance and forward-looking prospects, Leidos Holdings stands as a compelling investment option in the evolving market landscape.
Analyst comment
Positive news: Leidos Holdings receives a price target upgrade from Stifel amid strong financial performance, exceeding earnings expectations. The company also provides an optimistic guidance for 2024, with expected EPS and sales exceeding market expectations. Leidos’ consistent dividend payouts and solid market presence make it an attractive investment option.
Analyst prediction: With its strong performance and promising outlook, Leidos Holdings is likely to experience continued market growth and increased capital returns for shareholders.
