Leidos Holdings Receives Price Target Increase from Stifel, Boosted by Strong Financial Performance
Leidos Holdings, a leading player in the Professional Services industry, has received a price target increase from Stifel, highlighting the company’s robust financial performance and positive market outlook. Stifel has raised its price target for Leidos to $138 from the previous $125, while reaffirming its Buy rating on the stock.
The price target adjustment comes after Leidos reported impressive fourth-quarter earnings, surpassing both the consensus estimate and Stifel’s own estimate. The company’s adjusted earnings per share (EPS) stood at $1.99, beating the consensus estimate of $1.74 and Stifel’s estimate of $1.77. Additionally, Leidos’ revenue exceeded expectations.
Management at Leidos also provided an optimistic guidance for the company’s performance in 2024. The forecasted adjusted EPS is expected to be between $7.50 and $7.90, which is above the market projection. This positive outlook is attributed to an improved margin profile, expected to be in the mid-to-high 10% range, and lower tax rates.
The sales projection for 2024 stands at $15.7 to $16.1 billion, with cash from operations estimated to be around $1.1 billion. These figures align with current expectations and demonstrate the company’s strong financial position.
Stifel analysts view Leidos’ positive guidance as a starting point for the year, indicating that the company remains committed to its “promises made, promises delivered” philosophy. However, they also note the potential impact of budget uncertainties.
Stifel’s positive stance on Leidos is further supported by the company’s improving fundamentals and low net leverage profile. This positions Leidos well for potentially increased capital returns to shareholders.
Market data from InvestingPro provides additional context to Leidos’ financial health and market position. The company boasts a solid market presence, with a market capitalization of $16.55 billion. Although Leidos has a high price-to-earnings (P/E) ratio of 112.05, the adjusted P/E ratio for the last twelve months stands at a more reasonable 23.13. This indicates that while the stock may appear overvalued on a trailing basis, adjustments for forecasted earnings paint a different picture.
Furthermore, Leidos has a strong track record of returning value to shareholders. The company has raised its dividend for five consecutive years, showcasing its commitment to providing stable income. With a dividend yield of 1.33% and a dividend growth rate of 5.56% over the last twelve months, Leidos presents an attractive option for investors seeking stable income.
Overall, Leidos’ impressive financial performance, positive market outlook, and commitment to shareholder returns have positioned the company as a prominent player in the Professional Services industry. With a solid market presence and continued business expansion, Leidos is well-positioned for future growth and success.
Analyst comment
Positive news
As an analyst, I predict that Leidos Holdings will experience increased market demand and growth in its stock value due to its strong financial performance, positive market outlook, and commitment to shareholder returns. The price target increase from Stifel, along with the company’s impressive earnings and optimistic guidance, suggest that Leidos will continue to expand its business and provide value to investors.
