Booz Allen stock target cut to $135 by TD Cowen, retains buy rating

On Friday, TD Cowen’s analysts revised their price target for Booz Allen Hamilton (NYSE:BAH) shares, bringing it down from $155.00 to $135.00, while still maintaining a Buy rating on the stock. The adjustment follows concerns over the initial Fiscal Year 2026 guidance, which is expected to fall short of market expectations due to increased interest expenses and a cautious outlook on the macroeconomic environment. Analysts project that the company’s revenue guidance will be at the lower end of the long-term 5-8% growth range, contrary to the Street’s more optimistic assumption of an 8% increase. According to InvestingPro data, BAH has demonstrated strong revenue growth of 14% over the last twelve months, with an impressive financial health score rated as "GREAT."

Booz Allen Hamilton’s stock experienced a sharp sell-off amid worries about the impact of the Department of Defense’s budget (DOGE), even as the company has demonstrated a strong last twelve months (LTM) book-to-bill ratio and significant exposure to the cybersecurity sector. The firm has announced plans to double its $3 billion cyber business within the next five years. InvestingPro data shows the stock is currently trading nearly 30% below its six-month high, while maintaining strong fundamentals with a current ratio of 1.57 and moderate debt levels.

TD Cowen’s analysts believe that the market has an incorrect perception of Booz Allen Hamilton, viewing it as a management consultancy vulnerable to reductions in DOGE spending. They argue that this view is unfounded given the company’s strong performance and growth strategy in the cybersecurity domain.

The new price target of $135.00 represents approximately 14.7 times the estimated enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) for calendar year 2025. Despite the lowered price target, TD Cowen’s analysts continue to favor Booz Allen Hamilton stock, indicating a positive outlook on the company’s valuation and future performance.

In other recent news, Booz Allen Hamilton has issued $650 million in senior notes due 2035. This financial move involves a 5.950% interest rate and marks a significant transaction for the company. The notes are unsecured and unsubordinated obligations, guaranteed by Booz Allen Hamilton Holding Corporation. Additionally, Booz Allen Hamilton has partnered with Shield AI to develop AI-enabled autonomous solutions for the U.S. government, focusing initially on the Department of Defense. This collaboration aims to integrate advanced AI control systems into uncrewed systems, enhancing military capabilities. In a strategic personnel move, Mujtaba Hamid has been appointed as the Executive Vice President of Product, bringing over 25 years of experience to lead Booz Allen’s technology offerings. Furthermore, Raymond (NSE:RYMD) James has upgraded Booz Allen Hamilton’s stock rating to "Outperform," citing a significant backlog increase and a $1 billion buyback program. The analyst from Raymond James set a price target of $150.00, highlighting the company’s strong fundamentals and potential for growth.

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