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Investing.com - Citizens raised its price target on Amentum Holdings Inc. (NYSE:AMTM) to $35.00 from $30.00 on Wednesday, maintaining a Market Outperform rating following the company’s fourth-quarter fiscal 2025 results. This new target aligns closely with InvestingPro’s Fair Value assessment, which suggests the stock is currently undervalued despite trading at $30.00.
Amentum reported quarterly revenues of $3.93 billion, exceeding consensus estimates of $3.60 billion and representing a 10% increase on a pro forma basis. The company posted adjusted EBITDA of $300.0 million, above the consensus of $283.0 million. For the last twelve months, Amentum has generated $14.39 billion in revenue with an EBITDA of $937 million.
The defense and government services contractor delivered free cash flow of $261.0 million, surpassing expectations of $245.2 million, while adjusted diluted earnings per share reached $0.63, compared to consensus estimates of $0.58. InvestingPro data shows the company’s levered free cash flow for the last twelve months stands at $516 million, with a favorable free cash flow yield of 7%.
Citizens highlighted that Amentum stock has gained approximately 43% year-to-date, outperforming both the S&P Aerospace & Defense ETF (XAR), which is up about 36%, and the Russell 3000, which has risen approximately 14% during the same period.
The firm noted that Amentum is well-positioned as the government refocuses on efficiency, speed, and accountability, describing the company as a "low risk, high visibility opportunity" during a period of transition. While Amentum trades at a high P/E ratio of 93.96, its PEG ratio of 0.85 suggests it may be reasonably valued relative to its growth prospects. Discover more insights with InvestingPro, which offers 13 additional ProTips and a comprehensive research report on this prominent player in the Professional Services industry.
In other recent news, Amentum Holdings Inc. has secured a significant contract with the U.S. Air Force Air Combat Command, valued at up to $995 million. This contract involves providing maintenance support for the MQ-9 Reaper drone program over a five-year period, highlighting Amentum’s role in aerospace and defense. Additionally, Morgan Stanley has upgraded Amentum’s stock rating from Underweight to Equalweight, setting a new price target of $35. This upgrade reflects a more balanced risk-reward profile for the company. Meanwhile, UBS has initiated coverage on Amentum with a Neutral rating and a $25 price target. Citron Research has also highlighted Amentum’s dominant position in managing 90% of America’s nuclear infrastructure, setting a price target of $55. These developments underscore Amentum’s strategic position in both the defense and energy sectors.
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