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Investing.com - BofA Securities downgraded Booz Allen Hamilton (NYSE:BAH) from Buy to Underperform, slashing its price target to $90.00 from $160.00 amid concerns over the company’s civil business segment. The stock, currently trading near its 52-week low with a market capitalization of $11.1 billion, maintains a P/E ratio of 11, according to InvestingPro data.
The downgrade reflects BofA’s assessment that it "underestimated the extent of the challenges related to BAH’s Civil exposure," which represents approximately one-third of the company’s revenue. Despite a 7% headcount reduction and restructuring plan announced in late May, the civil business continues to face significant headwinds.
BofA now expects a further 30% decrease in Civil revenue for the second half of 2026 and first half of 2026, compared to its previous projection of a 5% decline. The revision comes amid "continued turmoil in Civilian agencies priorities" and "lack of a September budget flush."
Budget funding uncertainty, including potential government shutdown risks, adds further downside pressure to Booz Allen’s civil business outlook, according to the research note.
While BofA acknowledges that Booz Allen remains "strongly positioned across the National Security portfolio" with technical expertise in AI, 5G/6G, cloud, and cybersecurity, it does not expect these strengths to offset the growing pressure from the civil segment or drive near-term growth.
In other recent news, Booz Allen Hamilton reported its Q2 2026 earnings, which did not meet market expectations. The company announced an earnings per share (EPS) of $1.49, which was lower than the anticipated $1.53. Additionally, Booz Allen Hamilton’s revenue was reported at $2.9 billion, falling short of the expected $2.99 billion. These financial results have raised concerns among investors about the company’s current performance. Despite the earnings miss, there have been no recent updates on any mergers or acquisitions involving Booz Allen Hamilton. Analyst firms have not provided any new upgrades or downgrades following the earnings announcement. These developments highlight the recent financial challenges Booz Allen Hamilton is facing.
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