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On Wednesday, Truist Securities sustained its optimistic stance on Amentum Holdings Inc. (NYSE:AMTM) following the company’s release of favorable first-quarter 2025 results. With current revenue of $9.82 billion and EBITDA of $622 million, Amentum’s performance marked the company’s positive trajectory since going public. The quarter’s book-to-bill ratio stood at 1.1 times, or 1.5 times when including joint ventures. According to InvestingPro analysis, the company appears undervalued at its current market capitalization of $4.99 billion.
The firm’s analysts highlighted that Amentum upheld its financial guidance for the fiscal year 2025, suggesting there might be room for even better performance due to potential opportunities stemming from new government initiatives. This optimism aligns with InvestingPro data, which indicates expected sales growth and net income improvements for the current year. Truist’s analysts believe that Amentum’s business development efforts and its foray into new areas of work will bolster long-term growth, despite the company’s current weak gross profit margins of 10.27%.
Truist’s $31 price target for Amentum stock is predicated on a 10.2 times multiple of the firm’s estimated EBITDA for the calendar year 2025. This target aligns with the broader analyst consensus, as current targets range from $24 to $31. This valuation reflects a 6% discount compared to the company’s industry peers. The positive outlook is further supported by Truist’s anticipation of Amentum exceeding its synergy targets, which could provide additional upside to the stock’s performance. Discover more valuable insights and 8 additional ProTips for AMTM with an InvestingPro subscription.
Amentum Holdings Inc., now in its second quarter as a publicly-traded entity, has managed to maintain the guidance previously set for the fiscal year, an indication of stability and potential for growth in the eyes of Truist Securities. The firm remains bullish on Amentum’s prospects, especially as the company could benefit from the current administration’s new initiatives that may arise.
The company’s ability to meet and potentially surpass synergy targets is a key factor in the continued support from Truist Securities. Amentum’s strategic initiatives and expansion into new work are seen as significant contributors to its long-term growth forecast. The reiterated $31 price target and Buy rating reflect Truist’s confidence in Amentum’s future financial performance.
In other recent news, Amentum Holdings has made significant strides in its corporate affairs. The company has granted a considerable equity award to its CEO, John Heller, consisting of 1,373,955 stock options and 155,938 restricted stock units. This grant is aimed at compensating for the value of Mr. Heller’s previous equity awards that were affected by the company’s transition to a publicly-traded entity.
In the realm of financial analysis, Truist Securities maintained a Buy rating on Amentum stock with a price target of $31.00, expressing confidence in the company’s alignment with the Department of Energy’s initiatives. However, RBC Capital Markets initiated coverage with a Sector Perform rating and a price target of $24.00, citing growth exposure and budget uncertainties.
In addition to these developments, Amentum announced the appointment of Jennifer Walsmith as President of its Intelligence & Cybersecurity business. With over three decades of experience, Walsmith’s appointment strengthens the company’s position in intelligence analysis and technology.
Finally, despite expressing caution towards the Government Services sector, Truist identified Amentum as one of its favored names within the sector. These developments reflect the company’s ongoing progress and strategic movements.
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