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On Wednesday, RBC Capital Markets adjusted its price target for Leidos Holdings (NYSE:LDOS), a defense and information technology company with a market capitalization of $19.89 billion, following robust financial results for the first quarter of 2025. The new price target is set at $160, up from the previous $150, while the firm retains its Sector Perform rating on the stock. According to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.11, reflecting its strong market position and operational efficiency.
Leidos Holdings reported a strong start to the year with first-quarter adjusted earnings per share (EPS) of $2.97, surpassing the consensus estimate of $2.48. The company’s revenue saw a 7% increase, beating consensus forecasts by 4%. Trading at a P/E ratio of 15.37 and maintaining dividend payments for 14 consecutive years, the company demonstrates consistent performance. Additionally, adjusted earnings before interest and taxes (EBIT) and earnings before interest, taxes, depreciation, and amortization (EBITDA) both exceeded consensus expectations by 16%.
The impressive financial performance was attributed to continued outperformance in the Health & Civil sectors, as well as strength across the broader portfolio. Despite the positive results, Leidos’ management decided to maintain its guidance for 2025, which analysts at RBC Capital believe to be increasingly de-risked and conservative given the strong first-quarter performance.
Alongside its earnings report, Leidos provided more details on its NorthStar 2030 Strategy, which outlines the company’s long-term objectives. Furthermore, the company announced a pending acquisition in the cybersecurity space, signaling its commitment to expanding its capabilities in this critical area.
The RBC Capital analyst noted the company’s strong quarterly results support an improved outlook. The maintained Sector Perform rating and increased price target reflect confidence in Leidos’ operational performance and strategic initiatives. InvestingPro analysis suggests the stock is currently trading below its Fair Value, presenting a potential opportunity for investors. Discover 12 additional exclusive ProTips and comprehensive financial analysis in the Pro Research Report, available to InvestingPro subscribers.
In other recent news, Leidos Holdings Inc. reported impressive financial results for Q1 2025, exceeding analysts’ expectations with an earnings per share (EPS) of $2.97, compared to the forecasted $2.50. The company also surpassed revenue projections, posting $4.25 billion against the anticipated $4.09 billion. Leidos reaffirmed its full-year 2025 guidance, projecting revenue between $16.9 billion and $17.3 billion. Citi analysts responded positively by raising the company’s stock price target to $186 while maintaining a Buy rating, noting Leidos’ alignment with governmental priorities like missile defense and FAA modernization. The company’s strategic moves include its first acquisition under the current CEO, focusing on cyber capabilities, and an accelerated share repurchase agreement. Leidos’ adjusted EBITDA rose by 23%, with a margin increase to 14.2%, reflecting strong operational efficiency. Furthermore, Leidos launched a new strategy centered on five growth pillars, including space and maritime, while reaffirming its commitment to long-term growth in health, cyber, and government services.
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