RBC Capital has revised its price target for Leidos Holdings (LDOS) down to $215 from $230 but left its Outperform rating intact. The revised target sits below the market's top analyst projection of $235, according to market data. At the time of the revision the shares were trading around $161.53 and are viewed as undervalued when compared with a Fair Value assessment.
The broker pointed to a mixed set of fourth-quarter 2025 results as context for the change. Leidos reported revenues of roughly $4.2 billion for the quarter, a decline of 4% on a reported basis but an increase of 4% when excluding certain items. Adjusted EBITDA margin for the period was 13.2%.
For the full year, Leidos recorded $17.17 billion in revenue and reported EBITDA of $2.39 billion. Additional data points cited indicate the company continues to demonstrate strong profitability, with a return on equity of 31%.
RBC identified slowing VBA activity as a near-term headwind to Leidos' growth. The firm noted that this deceleration persists even as Leidos places greater emphasis on defense technology capabilities. RBC also emphasized that market participants are likely to continue valuing the company through the lens of a service provider.
Despite the headwinds, RBC expressed a constructive view of Leidos' strategic direction. The analyst welcomed the company’s transition toward increased exposure to growth markets, and supported management’s shift in capital allocation toward higher capital expenditures and mergers and acquisitions. On that basis, RBC expects both revenue growth and margin expansion to materialize by 2027.
Leidos’ published fourth-quarter 2025 earnings release supplied a mixed signal. The company reported earnings per share of $2.76, exceeding consensus expectations of $2.60 and representing a positive surprise of 6.15%. At the same time, revenue for the quarter came in at $4.23 billion versus an anticipated $4.31 billion, a shortfall of 1.86%.
The combination of an EPS beat and a revenue miss underlines the company's ability to manage costs and sustain profitability even when top-line results fall short of forecasts. Following the earnings release, the stock declined in pre-market trading as market participants weighed the results against broader conditions and strategic priorities. Such outcomes can influence future analyst projections and recommendations.
Contextual note - The details above reflect the company's reported financials and the analyst firm’s published view; market assessments and fair-value comparisons referenced draw on available valuation and analyst-target data.