Leidos Acquires ENTRUST for $2.4 Billion to Expand Energy Infrastructure

Written by Emily J. Thompson, Senior Investment Analyst

LDOS-1.24%

Source: Benzinga

Updated: 1d ago

0mins

Source: Benzinga

Acquisition Announcement: Leidos Holdings Inc. has announced its acquisition of ENTRUST Solutions Group for $2.4 billion in cash, aiming to capitalize on rising utility spending related to grid modernization and resilience, thereby expanding its footprint in regulated utility markets.
Revenue Growth Potential: This acquisition is expected to significantly scale Leidos' energy infrastructure engineering business, which currently generates approximately $600 million in annual revenue, while ENTRUST adds valuable experience across electric and gas utilities, covering generation, transmission, and distribution.
Market Demand Drivers: U.S. utilities are under increasing pressure to upgrade aging systems and enhance infrastructure resilience against extreme weather, with Leidos identifying these challenges as catalysts for long-term capital investment, positioning utility engineering as a stable and resilient growth area.
Financial Impact and Timeline: Leidos anticipates that the transaction will be immediately accretive to revenue growth and adjusted EBITDA margin, with earnings benefits expected by 2027, and plans to close the deal by the end of Q2 2026, pending regulatory approvals.

LDOS

$187.15+Infinity%1D

Analyst Views on LDOS

Wall Street analysts forecast LDOS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LDOS is 219.70 USD with a low forecast of 178.00 USD and a high forecast of 235.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

11 Analyst Rating

7 Buy

4 Hold

0 Sell

Moderate Buy

Current: 189.500

Low

178.00

Averages

219.70

High

235.00

Current: 189.500

Low

178.00

Averages

219.70

High

235.00

Truist

Michael Ciarmoli

maintain

$47 -> $54

2026-01-09

Reason

Truist

Michael Ciarmoli

Price Target

$47 -> $54

AI Analysis

2026-01-09

maintain

Reason

Truist analyst Michael Ciarmoli raised the firm's price target on Leonardo DRS to $54 from $47 and keeps a Buy rating on the shares. Despite a strong 2025, the Aerospace & Defense sector remains broadly bullish for 2026, with rising aircraft production and sustained aftermarket demand supporting both OE and AM segments, the analyst tells investors in a research note. Defense may see fewer catalysts, but recapitalization, geopolitical tensions, and replenishment needs should sustain demand, making stock selection critical amid elevated valuations, particularly for SMID defense tech names, the firm adds.

Stifel

Buy

Hold

downgrade

$220

2026-01-07

Reason

Stifel

Price Target

$220

2026-01-07

downgrade

Buy

Hold

Reason

Stifel downgraded Leidos to Hold from Buy with an unchanged price target of $220. The company has been executing "exceptionally well" on bookings, organic growth, and margins, the analyst tells investors in a research note. However, the firm sees a moderation of growth from Leidos' "high-margin" Department of Veterans Affairs compensation and pension medical exams as a challenge in 2026. This will hold back the stock, contends Stifel. While earnings from this "key contract" may not deteriorate as much as some worry, it will likely take time for Leidos to prove this sustainability, the firm says.

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Stifel

Jonathan Siegmann

Buy -> Hold

downgrade

$220

2026-01-07

Reason

Stifel

Jonathan Siegmann

Price Target

$220

2026-01-07

downgrade

Buy -> Hold

Reason

Stifel analyst Jonathan Siegmann downgraded Leidos to Hold from Buy with an unchanged price target of $220.

Citi

initiated

$218

2025-12-11

Reason

Citi

Price Target

$218

2025-12-11

initiated

Reason

Citi initiated coverage of Leidos with a Buy rating and $218 price target. The firm launched coverage on 24 stocks in the aerospace and defense sector, saying the group faces a "number of megatrends" across commercial aerospace, defense, shipbuilding, and space. Citi sees these trends creating at least one trillion-dollar market cap company in the coming years. GE Aerospace could get there in as little as five years, Citi contends. The firm calls RTX "the Marquee Megatrend stock" and believes Boeing is an "unusually attractive mega-cap turnaround" story. The analyst expects improving trends in Q4 and continued momentum in Q1 for the sector.

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.