Stifel has trimmed its price objective on Leidos Holdings (NYSE: LDOS) to $205 from $220 while maintaining a Hold recommendation, according to the firm. The downgrade in target comes amid analyst concerns about the company’s exposure to specific Veterans Affairs disability exam contracts and broader worries about AI-related disruption in services.
Analyst Jonathan Siegmann at Stifel reviewed Leidos’ fourth-quarter performance, noting that adjusted EBITDA outpaced his estimate by roughly 3.5%. Leidos also delivered a strong book-to-bill ratio of 1.3x in the fourth quarter, and the company reported that its book-to-bill exceeded 1.0x for 2025 overall - figures that Siegmann described as notable given recent turbulence across services firms.
Guidance for fiscal 2026 landed at a midpoint that the analyst characterized as either in line with or modestly below consensus expectations prior to the earnings release, which Stifel views as a beatable threshold. Despite those operational positives, Stifel sees potential near-term pressure on the shares driven primarily by investor uncertainty about the company’s VA disability exam contracts. The firm also points to worries around AI disruption as an additional dampener on sentiment.
In light of these factors, Stifel indicated a preference to recommend other names within the sector for the time being.
Separately, Leidos reported fourth-quarter 2025 results that beat on earnings per share but missed on revenue. The company posted EPS of $2.76 versus an expected $2.60, a surprise of 6.15%. Revenue for the quarter was $4.23 billion, short of the $4.31 billion analysts had anticipated by about 1.86%.
RBC Capital responded to the earnings by keeping an Outperform rating on Leidos but lowering its price target to $215 from $230. RBC noted the mixed nature of the quarter: reported revenues near $4.2 billion that represent a 4% decline on a reported basis but a 4% increase when certain items are excluded. Adjusted EBITDA margins were cited at 13.2%.
Taken together, the analyst commentary and the company’s reported results paint a picture of operational resilience in some metrics - notably EBITDA and book-to-bill - alongside revenue pressures and contract-specific risks that are weighing on near-term sentiment among institutional analysts.