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Investing.com - JPMorgan downgraded Science Applications (NASDAQ:SAIC) from Overweight to Neutral on Monday, while reducing its price target to $115.00 from $140.00. The stock, which has declined nearly 11% in the past week and is trading at a P/E ratio of 12.9x, appears undervalued according to InvestingPro analysis.
The downgrade comes as the company faces a weakening revenue outlook in recent months, with JPMorgan noting that SAIC’s strategic pivot is proving more challenging than expected following the administration change.
Despite acknowledging management’s transparency about difficulties and seeing potential value in SAIC’s increased bidding activity and stock buyback capabilities, the investment bank expressed concerns about the sluggish revenue environment expected in coming quarters.
JPMorgan established a December 2026 price target of $115, which represents approximately 11 times the firm’s fiscal year 2028 adjusted earnings per share estimate of $10.25.
The research firm’s revised estimates for SAIC have been reduced to levels that JPMorgan describes as "not especially unique," contributing to the decision to lower the stock’s rating.
In other recent news, Science Applications International Corp (SAIC) reported its Q2 FY2026 earnings, which showed a notable earnings per share (EPS) beat. The company achieved an EPS of $3.63, surpassing the forecasted $2.24, representing a 62.05% surprise. However, despite this positive earnings result, the company reported a revenue miss, with actual revenue at $1.77 billion compared to the expected $1.87 billion, marking a 5.35% shortfall. The revenue miss has raised concerns among investors regarding the company’s future performance. In response to these developments, Stifel has adjusted its price target for Science Applications to $128.00 from $130.00, while maintaining a Buy rating on the stock. The adjustment follows the company’s downgraded revenue outlook, attributed to prolonged market challenges. These developments highlight the mixed financial performance and outlook for Science Applications in the current market environment.
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