Truist maintains Buy on Amentum stock, steady at $31 target

Published 21/01/2025, 19:56
Truist maintains Buy on Amentum stock, steady at $31 target

On Tuesday, Truist Securities expressed continued confidence in Amentum Holdings Inc. (NYSE:AMTM), maintaining a Buy rating and a price target of $31.00, representing a potential 33% upside from the current price of $22.85.

The affirmation follows a non-deal roadshow (NDR) with CEO John Heller, CFO Travis Johnson, and SVP of Investor Relations Nathan Rutledge. During the discussions, management highlighted that Amentum's work is well-aligned with the Department of Energy's (DOE) initiatives and is likely to remain robust under an 'America First' administration. According to InvestingPro data, the company appears undervalued based on its Fair Value analysis.

The company's leadership conveyed that the merger has positioned Amentum to enhance bid efficiency and volume, as well as to branch out into new areas of operation. With revenue of $8.4 billion in the last twelve months and impressive revenue growth of 51.5%, Truist's analysts are optimistic about Amentum's potential to exceed its synergy targets and strengthen its presence in the energy and environmental sectors. InvestingPro subscribers can access 8 additional key insights about Amentum's growth prospects and financial health.

The price target set by Truist is based on a 10.3 times multiple of the firm's calendar year 2025 earnings estimates, which reflects a 12% discount compared to its industry peers. With analysts forecasting strong sales growth and profitability this year, Amentum's management team's recent assertions reinforce the company's strategic alignment with governmental priorities and its prospects for growth within its market niche.

In other recent news, Amentum Holdings Inc. has been the focus of several major developments. RBC Capital Markets has initiated coverage on Amentum shares with a Sector Perform rating, citing the company's robust free cash flow and significant backlog. However, they also noted the company's growth prospects might be limited compared to its peers. Truist Securities, on the other hand, initiated coverage with a Buy rating, despite expressing some skepticism due to slower bookings.

Amentum has secured several substantial contracts, including a $279 million contract from the U.S. Air Force, a $105 million contract from the U.S. Navy, and a $3 billion contract from the Department of Energy. These contracts underline the company's strong position in the government services sector.

In addition to these contracts, Amentum has also witnessed significant changes in its leadership team. The company has appointed Jennifer Walsmith as President of its Intelligence & Cybersecurity business, Darren Burton as its new Chief People Officer, and Stephen A. Arnette as the new Chief Operating Officer. These recent developments provide a snapshot of the current state of affairs at Amentum Holdings Inc.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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