Leidos Average Price Target Lowered to $148.5 as Analysts Maintain Buy Rating
Analyst consensus lowered the average 12-month price target for Leidos Holdings to $148.5, down from $153.6, while retaining an overall Buy rating following strong third-quarter results.
Wall Street analysts have revised their outlook on Leidos Holdings, Inc. According to estimates compiled from 14 analysts, the company's average 12-month price target fell to $148.5 from $153.6. Individual analyst projections range from $120 to $170 per share. Based on the Nov. 11 closing price, this updated average implies approximately 11% potential upside. Despite the lower target, the consensus rating remains at Buy across 18 covering analysts, comprising 5 Buys, 13 Holds, and 0 Sells.
This revision follows an adjustment just days earlier, when FactSet reference data reported an average target increase from $152.13 to $153.6 based on 15 analysts, with expectations ranging between $120 and $225. Based on the Nov. 6 closing price, that prior target reflected about 16% upside from a pool of 20 analysts with 6 Buys, 14 Holds, and 0 Sells.
The target changes arrive shortly after Leidos posted its third-quarter financial results. The company reported revenue of $4.63 billion, marking a 4% increase year over year, with 1% organic growth. Adjusted EBITDA reached $644 million, reflecting a margin of 13.9% that expanded by 10 basis points sequentially and year over year. Non-GAAP diluted earnings per share grew 19% to $3.62.
Cash generation stood out during the quarter. Leidos produced $523 million in operating cash flow and $476 million in free cash flow. This lifted year-to-date free cash flow to $1.5 billion, surpassing the company's initial full-year target, according to CEO Tom Bell. Total backlog increased 4% year over year to $49.6 billion, aided by $5.5 billion in net awards and a 1.2x book-to-bill ratio. Funded backlog rose 22% over the prior year to $11.1 billion.
Segment performance was mixed. The Homeland segment experienced 32% total growth, while the Defense segment advanced 3% year over year. In contrast, the Health segment contracted due to shifts in its Veterans Benefits Administration disability exam work. Management flagged the timing and outcome of the upcoming VBA contract recompete as an ongoing uncertainty, noting current contracts may extend into the first half of 2027 as the process unfolds.