JPMorgan cuts Leidos rating to Neutral and lowers price target to $142
JPMorgan downgraded Leidos Holdings (LDOS) from Overweight to Neutral and reduced its price target from $160 to $142. The bank projects 1‑2% organic revenue growth in 2027 but expects the Health segment margin to fall from 22% to 16%, pulling adjusted EBITDA margin down 150 basis points. JPMorgan noted the recent Q2 2026 earnings beat and a new $85 million Department of War contract but remains concerned about margin pressure and the VA contract rebid. The downgrade follows a 37% year‑to‑date decline in Leidos’ share price.
Why it matters
JPMorgan’s lower target and rating signal reduced near‑term upside for the stock, which could prompt further selling pressure. The bank’s margin outlook suggests earnings may be weaker than previously expected, affecting investors’ valuation models.
Key facts
- 1JPMorgan downgraded Leidos to Neutral from Overweight. investing.com
- 2The price target was cut to $142 from $160. investing.com
- 3JPMorgan projects 2027 sales just above $18 billion, representing 1‑2% organic growth. investing.com
- 4Adjusted EBITDA margin is expected to fall to 11.8%, down 150 basis points year‑over‑year. investing.com
- 5Health segment margins are forecast to decline from 22% to 16%. investing.com
- 6Leidos reported Q2 2026 adjusted earnings of $3.26 per share on revenue of $4.56 billion. investing.com
Summary written by AlphAI from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.