Street Calls of the Week
Investing.com - Cantor Fitzgerald has reiterated an Overweight rating on CACI International (NYSE:CACI) while raising its price target to $675 from $535 ahead of the company’s fiscal first-quarter 2026 earnings report, scheduled for October 22. According to InvestingPro data, CACI has demonstrated strong financial health with a GOOD overall score and robust revenue growth of 12.64% over the last twelve months.
The research firm believes CACI stock can continue its upward trajectory despite already outperforming the S&P 500 year-to-date, with CACI shares gaining 32% compared to the index’s 14% rise. Cantor attributes this potential for further growth to increasing investor interest in pure-play defense and intelligence exposure, which represents approximately 90% of CACI’s revenue.
Cantor Fitzgerald notes that CACI currently trades at a 20% discount to the S&P 500 on a forward EV/EBITDA basis, compared to historical periods when it traded at premiums of 30% in 2002 and 45% in 2008. The firm suggests this valuation gap presents potential upside of roughly 50-75% if the company returns to previous premium levels.
The research firm acknowledges that slowness in government budget approvals may pressure growth and margins in the upcoming quarter. However, it believes any disruptions will be understood as timing issues due to management’s conservative messaging approach and credibility.
Cantor’s increased price target reflects both the rolling forward of estimates from fiscal year 2026 to fiscal year 2027 and improved assumptions for growth, margins, and cash tax benefits, while maintaining target multiples of 15x EV/EBITDA and a 6% free cash flow yield.
In other recent news, CACI International Inc has been awarded a five-year contract worth over $73 million to modernize the Department of the Air Force’s intelligence network. This contract will focus on the Integrated Broadcast Services-Network Services system, ensuring secure and timely situational awareness for military operations. Additionally, CACI secured another five-year task order, valued at up to $180 million, to provide network operations for the Air Force’s Pacific Air Forces. This project aims to modernize the Air Force’s IT infrastructure across the Pacific theater.
Moreover, CACI has been awarded two contracts totaling approximately $124 million to support the Canadian Armed Forces with Counter Uncrewed Aircraft System platforms. On the financial front, Goldman Sachs upgraded CACI International’s stock rating from Sell to Buy, citing the company’s strong positioning in the defense sector. Meanwhile, Raymond James maintained its Market Perform rating, noting CACI’s solid fourth-quarter results and fiscal 2026 guidance aligning with consensus revenue forecasts. These developments highlight CACI’s continued expansion and strong performance in the defense sector.
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