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Investing.com - Jefferies downgraded CACI International (NYSE:CACI) from Buy to Hold on Wednesday, while lowering its price target to $535.00 from $570.00. The $10.37 billion market cap company has shown impressive momentum with a 25.66% return over the past six months, according to InvestingPro data.
The downgrade comes as the defense contractor’s multiple has returned to its 10-year average of 32% discount to S&P free cash flow yield based on fiscal year 2026 guidance, which is expected to show 4-6% growth compared to its 10-year average organic growth of 4%.
Jefferies forecasts 5% revenue growth for CACI in fiscal year 2026, representing a sharp deceleration from the 9% organic growth expected in fiscal year 2025.
The firm estimates that 1.2 percentage points of the company’s fiscal 2026 growth will come from Enterprise IT as a Service (EITaaS), which Jefferies notes presents "moderate contract risk."
Jefferies’ new $535 price target is based on a three-year average 16% discount to the S&P fiscal year 2 price-to-earnings ratio on the firm’s $30.85 earnings per share estimate for fiscal year 2027, suggesting limited upside potential for the stock.
In other recent news, CACI International has been the focus of several significant developments. The company recently announced the passing of its chairman, Michael A. Daniels, who had been a director since 2013 and chairman since January 2021. Following his death, Lisa S. Disbrow has been elected as the new Chair of the board. On the financial front, Raymond (NSE:RYMD) James downgraded CACI International’s stock rating from Outperform to Market Perform, citing the stock’s strong performance since its previous upgrade. Conversely, William Blair upgraded the company’s stock rating from Market Perform to Outperform, highlighting CACI’s notable position in the counter-drone system market. Additionally, Jefferies raised its price target for CACI International to $570, maintaining a Buy rating in anticipation of the company’s upcoming fiscal fourth-quarter 2025 results and fiscal year 2026 guidance. CACI International was also mentioned in a report by the Wall Street Journal, as the Trump administration seeks to reduce federal contract spending, impacting several tech companies. This move by the General Services Administration is part of the "OneGov" strategy aimed at consolidating federal purchasing.
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