Intel stock extends gains after report of possible U.S. government stake
Investing.com -- Goldman Sachs upgraded CACI International to Buy from Sell and downgraded Parsons to Neutral from Buy, citing diverging growth prospects in the U.S. government IT and services sector.
The brokerage said CACI is better positioned than peers following a shift toward advanced technologies, with a trailing 12-month funded book-to-bill ratio above 1 and margins exceeding the sector average.
Goldman expects the company to grow faster than rivals over the medium term and noted its valuation is now below Booz Allen Hamilton and Parsons on revised estimates.
For Parsons, Goldman pointed to uncertainty over growth after the roll-off of a major federal contract, saying it would be difficult to achieve the implied acceleration in its core business in the second half of 2025.
The firm also flagged a challenging comparison for fiscal 2026 and said Parsons now trades at the highest multiples in the group following a sharp rebound in its shares.
Earnings from AMTM, Leidos, and V2X were generally ahead of expectations in the second quarter, though company-level bookings were mixed as government funding decisions remain in flux under shifting policy priorities.
“We remain relatively cautious on the Government IT & Services group, as the US government is still implementing government efficiency initiatives,” analyst at Goldman Sachs.
“DOGE remains active in federal civilian agencies and the DoD, and the DoD has released several memos that raise the threshold for contracting third party IT work, implementation work, and services across the department”