Leidos Shares Drop After Price Target Downgrade by Bank of America
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 06 2026
0mins
Source: CNBC
Leidos Holdings Inc. shares fell 4.03% during regular trading, hitting a 52-week low amid broader market declines, with the Nasdaq-100 down 0.46% and the S&P 500 down 0.35%.
The decline follows a significant price target downgrade by Bank of America, which lowered Leidos from Buy to Neutral and cut its price target from $200 to $125. This decision was primarily driven by concerns over increasing pressure on its healthcare business, particularly from the Defense Health Agency's direct supplier engagement, which could impact future profitability. Despite these challenges, Leidos reported a 4% revenue increase in Q1, indicating some resilience in its overall financial health.
The implications of this downgrade may lead to further volatility in Leidos' stock as investors reassess the company's growth prospects in light of the healthcare pressures. However, the company's strong backlog and financial position could present a buying opportunity for long-term investors.
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Analyst Views on LDOS
Wall Street analysts forecast LDOS stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 101.760
Low
178.00
Averages
219.70
High
235.00
Current: 101.760
Low
178.00
Averages
219.70
High
235.00
About LDOS
Leidos Holdings, Inc. is a holding company, which operates through its wholly owned subsidiary, Leidos, Inc. (Leidos). The Company's segments include National Security & Digital, Health & Civil, Commercial & International and Defense Systems. Its National Security & Digital business provides technologically advanced services, solutions and products, as well as mission software capabilities for defense and intelligence customers in the areas of cyber, logistics, security operations and decision analytics. Its Health & Civil business provides services and solutions to federal and commercial customers in the areas of public health, care coordination, life and environmental sciences and transportation. Its Commercial & International business delivers a portfolio of products, services, and solutions aimed at securing national assets, modernizing energy and critical infrastructure, and enhancing mission outcomes. The Company serves government and commercial customers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Enhanced Data Access: By combining the two platforms, customers will be able to access data stored across cloud and on-premise environments through a unified layer designed to improve data availability for AI applications, helping agencies organize fragmented data into reusable products.
- Reduced Implementation Time: The integrated offering is built on open standards and is designed to shorten implementation times by leveraging existing infrastructure rather than replacing it, providing government agencies with a faster path to deploying AI capabilities while minimizing costs and disruptions associated with technology upgrades.
- Data Quality Issues: According to The Modern Data Report 2026, 68% of data practitioners reported their data was not reliable enough for AI use cases, while 89% indicated that locating relevant data remained one of their most time-consuming tasks, highlighting the ongoing challenges that Leidos aims to address through this partnership.
See More
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- Partnership Context: Leidos collaborates with The Modern Data Company to assist federal agencies in connecting and organizing fragmented data without major system overhauls, thereby accelerating insights and governance capabilities.
- Technology Integration: By embedding Modern Data's AI-native data operating system, DataOS®, into Leidos' HeadWay Mission OS™, customers can securely link data between cloud and on-premise systems, ensuring consistent and reliable data access.
- Market Demand: According to the 2026 Modern Data Report, 68% of data practitioners find their data unreliable for AI use cases, and 89% say finding the right data is their most time-consuming task, highlighting the need for this partnership to address these challenges.
- Strategic Implications: This collaboration advances Leidos' NorthStar 2030 strategy, aiming to deliver secure and scalable digital modernization solutions for government and commercial customers, enabling them to apply AI at scale without replacing existing infrastructure.
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- Rocket Boost: The upcoming Neutron rocket will enhance Rocket Lab's payload capacity to 13,000 kilograms, allowing it to compete directly for high-margin national security and deep-space missions, further solidifying its market position.
- Infrastructure Demand: Leidos' $2.5 billion, 10-year contract with NASA to manage telecommunications and cybersecurity infrastructure connecting all NASA centers highlights its significant financial footprint in space operations, making it a focal point for investors.
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- Leidos' Market Position: Leidos reported $4.4 billion in revenue for Q1, a 4% increase, and boasts a massive backlog of $48.4 billion, underscoring its strong market position in aerospace infrastructure and IT solutions despite slower growth.
- Strategic Importance of Neutron Rocket: Rocket Lab's Neutron rocket is set to debut later this year, increasing payload capacity to 13,000 kilograms, allowing it to compete directly with SpaceX's Falcon 9 for high-margin national security and deep-space missions.
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See More
Leidos Shares Plummet Following Price Target Downgrade
- Significant Price Drop: Leidos shares fell notably this week, dropping 11% from last Friday's close, indicating investor concerns about the company's future prospects after a period of flat trading.
- Price Target Downgrade: Bank of America downgraded Leidos from Buy to Neutral and cut its price target from $200 to $125, primarily due to expectations of increasing pressure on its healthcare business, reflecting a reassessment of the company's health.
- Healthcare Business Pressure: While Leidos's managed healthcare segment has been strong, Bank of America believes that the Defense Health Agency is now working directly with suppliers, which may increase pressure on Leidos's healthcare portfolio and impact future profitability.
- Investment Opportunity Analysis: Despite the downward pressure, Leidos remains financially healthy with a current share price of $107.12 and a P/E ratio of 10, which is below the five-year average of 20.6, potentially presenting an attractive buying opportunity for investors.
See More
Bank of America Downgrades Leidos Rating and Price Target
- Rating Downgrade: Bank of America downgraded Leidos from Buy to Neutral and cut its price target from $200 to $125, reflecting concerns over its healthcare business, particularly increased pressure from the Defense Health Agency.
- Stock Price Decline: Following a flat trading week, Leidos shares fell 11% this week, prompting investors to sell off due to the downgrade, which significantly impacted the stock's performance.
- Financial Health: Despite the downgrade, Leidos maintains a strong financial position with high profitability and no debt, closing at $113.58, which implies a 10% upside to Bank of America's target price, indicating potential investment value.
- Market Reaction Excessive: While Bank of America's concerns are notable, the market's reaction appears excessive, with Leidos trading at a trailing P/E of 10, significantly below its five-year average of 20.6, suggesting a favorable entry point for investors.
See More
Leidos Partners with Modern Data Company to Enhance AI Capabilities
- Strategic Partnership: Leidos has partnered with The Modern Data Company to integrate the latter's DataOS platform into its HeadWay Mission OS, aiming to assist federal agencies in connecting data across legacy systems and supporting AI and analytics initiatives, thereby modernizing government technology infrastructure.
- Enhanced Data Access: By combining the two platforms, customers will be able to access data stored across cloud and on-premise environments through a unified layer designed to improve data availability for AI applications, helping agencies organize fragmented data into reusable products.
- Reduced Implementation Time: The integrated offering is built on open standards and is designed to shorten implementation times by leveraging existing infrastructure rather than replacing it, providing government agencies with a faster path to deploying AI capabilities while minimizing costs and disruptions associated with technology upgrades.
- Data Quality Issues: According to The Modern Data Report 2026, 68% of data practitioners reported their data was not reliable enough for AI use cases, while 89% indicated that locating relevant data remained one of their most time-consuming tasks, highlighting the ongoing challenges that Leidos aims to address through this partnership.
See More
Leidos Partners with Modern Data Company to Enhance Data Access
- Partnership Context: Leidos collaborates with The Modern Data Company to assist federal agencies in connecting and organizing fragmented data without major system overhauls, thereby accelerating insights and governance capabilities.
- Technology Integration: By embedding Modern Data's AI-native data operating system, DataOS®, into Leidos' HeadWay Mission OS™, customers can securely link data between cloud and on-premise systems, ensuring consistent and reliable data access.
- Market Demand: According to the 2026 Modern Data Report, 68% of data practitioners find their data unreliable for AI use cases, and 89% say finding the right data is their most time-consuming task, highlighting the need for this partnership to address these challenges.
- Strategic Implications: This collaboration advances Leidos' NorthStar 2030 strategy, aiming to deliver secure and scalable digital modernization solutions for government and commercial customers, enabling them to apply AI at scale without replacing existing infrastructure.
See More
SpaceX IPO Shakes Market, Rocket Lab and Leidos Emerge as New Investment Favorites
- Market Shockwaves: SpaceX's IPO has transformed the market into a multitrillion-dollar giant, creating a temporary liquidity vacuum, yet this historic debut validates the immense scale of the modern space economy.
- Investment Opportunities: Rocket Lab generated $200 million in revenue in Q1, up over 63% year-over-year, with a backlog of $2.2 billion, showcasing its immense potential as a rapidly growing player and making it an ideal choice for investors.
- Rocket Boost: The upcoming Neutron rocket will enhance Rocket Lab's payload capacity to 13,000 kilograms, allowing it to compete directly for high-margin national security and deep-space missions, further solidifying its market position.
- Infrastructure Demand: Leidos' $2.5 billion, 10-year contract with NASA to manage telecommunications and cybersecurity infrastructure connecting all NASA centers highlights its significant financial footprint in space operations, making it a focal point for investors.
See More
Investment Opportunities in Rocket Lab and Leidos Post-SpaceX IPO
- Rocket Lab's Growth Potential: Rocket Lab achieved $200 million in revenue in Q1, up over 63% year-over-year, with a backlog of $2.2 billion, indicating strong performance in the rapidly growing aerospace market, especially with the upcoming launch of its reusable Neutron rocket.
- Leidos' Market Position: Leidos reported $4.4 billion in revenue for Q1, a 4% increase, and boasts a massive backlog of $48.4 billion, underscoring its strong market position in aerospace infrastructure and IT solutions despite slower growth.
- Strategic Importance of Neutron Rocket: Rocket Lab's Neutron rocket is set to debut later this year, increasing payload capacity to 13,000 kilograms, allowing it to compete directly with SpaceX's Falcon 9 for high-margin national security and deep-space missions.
- Infrastructure Demand in Space Economy: As SpaceX reduces the cost of reaching orbit, the demand for satellite manufacturing, software, and cybersecurity will surge, positioning Rocket Lab and Leidos as essential infrastructure providers in this expanding trillion-dollar space economy.
See More
Leidos Shares Plummet Following Price Target Downgrade
- Significant Price Drop: Leidos shares fell notably this week, dropping 11% from last Friday's close, indicating investor concerns about the company's future prospects after a period of flat trading.
- Price Target Downgrade: Bank of America downgraded Leidos from Buy to Neutral and cut its price target from $200 to $125, primarily due to expectations of increasing pressure on its healthcare business, reflecting a reassessment of the company's health.
- Healthcare Business Pressure: While Leidos's managed healthcare segment has been strong, Bank of America believes that the Defense Health Agency is now working directly with suppliers, which may increase pressure on Leidos's healthcare portfolio and impact future profitability.
- Investment Opportunity Analysis: Despite the downward pressure, Leidos remains financially healthy with a current share price of $107.12 and a P/E ratio of 10, which is below the five-year average of 20.6, potentially presenting an attractive buying opportunity for investors.
See More
Bank of America Downgrades Leidos Rating and Price Target
- Rating Downgrade: Bank of America downgraded Leidos from Buy to Neutral and cut its price target from $200 to $125, reflecting concerns over its healthcare business, particularly increased pressure from the Defense Health Agency.
- Stock Price Decline: Following a flat trading week, Leidos shares fell 11% this week, prompting investors to sell off due to the downgrade, which significantly impacted the stock's performance.
- Financial Health: Despite the downgrade, Leidos maintains a strong financial position with high profitability and no debt, closing at $113.58, which implies a 10% upside to Bank of America's target price, indicating potential investment value.
- Market Reaction Excessive: While Bank of America's concerns are notable, the market's reaction appears excessive, with Leidos trading at a trailing P/E of 10, significantly below its five-year average of 20.6, suggesting a favorable entry point for investors.
See More
