On Tuesday, Truist Securities adjusted its price target for Leidos Holdings (NYSE:LDOS), a defense, aviation, information technology, and biomedical research company. The firm increased the target to $205.00 from the previous $175.00 while maintaining a Buy rating on the stock.
The revision follows Leidos Holdings' recent announcement of robust financial results and an elevated guidance for 2024. The company also provided preliminary comments on its 2025 outlook, suggesting an EBITDA of approximately $2.10 billion or higher. This estimate indicates a margin of over 12.2%, surpassing the prior market expectation of $1.98 billion with an 11.6% margin.
The analyst at Truist Securities expressed confidence in the updated price target, stating, "We raise our PT to $205 from $175 following LDOS reporting strong results and increasing 2024 guidance." The firm's decision reflects the positive assessment of Leidos' financial performance and future prospects.
Additionally, the analyst reaffirmed the Buy rating for Leidos Holdings, signaling continued optimism about the company's stock performance. Adjustments to the firm's estimates were made in light of the new information provided by Leidos regarding its future financial outlook.
Leidos Holdings' updated guidance and the revised price target from Truist Securities come as significant indicators of the company's strong position and expected performance in the upcoming years. The increased target price reflects the firm's anticipation of continued success for Leidos in its various sectors of operation.
In other recent news, Leidos Holdings Inc. reported a surge in third-quarter earnings, significantly surpassing analyst expectations and leading to an upward revision of its full-year guidance. The defense and technology services provider recorded adjusted earnings per share of $2.93, comfortably beating the analyst consensus of $2.01. Revenue for the quarter stood at $4.19 billion, exceeding estimates of $4.07 billion and marking a 7% year-over-year increase.
Leidos' CEO, Tom Bell, attributed the robust performance to improvements across all segments, which resulted in record margins for net income and adjusted EBITDA, substantial earnings growth, and strong cash flow. The company's adjusted EBITDA margin reached an all-time high of 14.2%, up from 11.5% in the same quarter last year.
Looking ahead, Leidos has raised its full-year guidance, now expecting FY2024 EPS of $9.80-$10.00, up from the previous analyst consensus of $9.08. Full-year revenue is projected to be $16.35-16.45 billion, above the consensus estimate of $16.3 billion.
The company also reported strong bookings of $8.1 billion for the quarter, pushing the total backlog to $40.6 billion. In another recent development, Leidos announced a 5.3% increase in its quarterly dividend to $0.40 per share.
InvestingPro Insights
Leidos Holdings' strong financial performance and positive outlook, as highlighted in the article, are further supported by real-time data from InvestingPro. The company's market capitalization stands at $25.08 billion, reflecting its significant presence in the Professional Services industry. Leidos has demonstrated impressive revenue growth, with a 7.86% increase in the last twelve months as of Q2 2024, aligning with the robust financial results mentioned in the article.
InvestingPro Tips reveal that Leidos has raised its dividend for 6 consecutive years, indicating a commitment to shareholder returns. This is particularly noteworthy given the company's strong financial performance and increased guidance for 2024. Additionally, the stock is trading near its 52-week high, which corroborates the positive sentiment expressed in the analyst's revised price target.
The company's profitability is underscored by its adjusted operating income of $1.596 billion in the last twelve months, with an operating income margin of 9.97%. This solid financial foundation supports the analyst's optimistic outlook and the increased price target.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Leidos Holdings, providing deeper insights into the company's financial health and market position.
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