Today's Trend
Leidos Holdings, Inc. (NYSE: LDOS) moved higher as investors responded to a stronger-than-expected second quarter, increased 2026 guidance, solid cash generation and continued demand for defense technology and artificial-intelligence-related work.
- Quarterly results exceeded expectations: Leidos reported $4.56 billion in second-quarter revenue, up 7.2% year over year, and non-GAAP EPS of $3.26 versus the $2.91 consensus estimate. Defense, homeland security and intelligence demand supported the performance. Leidos Delivers Strong Second Quarter and Enhances Full-Year Guidance
- Full-year outlook was raised: Management increased 2026 revenue guidance to $18.2 billion-$18.4 billion from $18.0 billion-$18.4 billion and set non-GAAP EPS guidance at $12.20-$12.50. Operating cash flow is expected to reach approximately $1.85 billion, with higher free cash flow anticipated despite roughly $250 million of planned capital spending. Leidos anticipates higher 2026 free cash flow
- Bookings and defense-related growth reinforced visibility: Leidos generated $4.9 billion in net bookings, a 1.1 book-to-bill ratio, and ended the quarter with $48.7 billion in backlog, including $10.2 billion funded. New defense AI work and growth in defense technology, energy infrastructure and intelligence missions added to the bullish narrative. Leidos Is Up After Raising 2026 Outlook and Winning New Defense AI Work
- Analysts became more constructive: BNP Paribas Exane raised its price target to $175 and maintained an “outperform” rating, while UBS lifted its target to $138 but retained a “neutral” rating. The revisions indicate improved earnings expectations, although analyst conviction remains mixed. Analyst price-target updates
- Some earnings quality concerns remain: Reported net income declined year over year, and acquisition and joint-venture costs weighed on results. Management also highlighted pressure in the Health segment, partially offsetting stronger defense and intelligence performance. Recent insider activity included sales rather than purchases, a secondary sentiment headwind.