CACI International stock rating upgraded by William Blair on drone exposure

Investing.com - William Blair upgraded CACI International (NYSE:CACI) from Market Perform to Outperform, citing the company’s significant position in the counter-drone system market. The $10.75 billion market cap company, currently trading at $489.02, has demonstrated strong momentum with a 21% return year-to-date according to InvestingPro data.

The upgrade follows the weekend passage of the One Big Beautiful Bill Act, which includes extensive drone funding. William Blair’s analysis indicates CACI is one of the industry’s largest counter-drone system providers, though the firm describes this position as "under-the-radar."

William Blair previously identified CACI as a beneficiary of the $150 billion Defense Reconciliation Bill, which included $1.9 billion in funding for counter-drone systems. The firm’s tracker also suggests solid June-quarter bookings for CACI.

Despite earlier concerns about the administration’s crackdown on consulting firms and systems integrators that led William Blair to lower ratings across the government tech services group in February, CACI’s business has "largely been unscathed."

William Blair believes CACI shares offer investors drone exposure at a discount to peers, with shares trading at 13 times forward EBITDA, and sees potential for a valuation multiple re-rating to 15 times as investors increasingly recognize CACI’s counter-drone business.

In other recent news, CACI International has secured contracts valued at approximately $638 million with the intelligence community, enhancing its role in national security efforts. The company also announced an upsized senior notes offering to $1 billion, increasing by $250 million from its initial plan, with the proceeds intended to reduce debt under its revolving credit facility. Additionally, CACI launched a $750 million senior notes offering, aimed at institutional buyers, which will also be used to lower existing debt. In analyst actions, Jefferies raised its price target for CACI International to $570, maintaining a Buy rating, and projected a 20 basis point margin expansion in fiscal year 2026. The company is expected to provide fiscal year 2026 guidance alongside its fiscal fourth-quarter 2025 results. Meanwhile, CACI was among several tech companies affected by a government initiative to cut federal contract spending, as reported by the Wall Street Journal. The initiative is part of a broader strategy to streamline federal purchasing and transition to outcome-based contracts.

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