Leidos Hld (LDOS) Stock Forecast & Price Target

Leidos Holdings is supported by a strong 1Q26 beat, with adj. EPS of $3.13 versus $2.90 consensus and revenues of $4.4B up 4% YoY, while the ~$2.4B Entrust acquisition and a raised 2026 guide improved the growth outlook and lifted expected adj. EBITDA margins to the mid-13% range. Its Health segment remains a key anchor, as flat revenue still produced a 24.2% adj. operating margin and veterans exam volumes stayed elevated, while defense exposure to air defense, hypersonics, and unmanned ships adds durable longer-term demand. Although near-term visibility is clouded by 2027 uncertainty and a soft 2Q26, backlog and awards momentum remain constructive, with funded backlog up 31%, 2024 and 2025 book-to-bill at 1.4x and 1.0x, and $9B in defense tech awards over the last 15 months.

Leidos Holdings is vulnerable to the level of government spending, especially annual defense and VA appropriations, making its revenue base sensitive to shifting congressional priorities, national security policy, and broader budget politics. Although 1Q26 adjusted EBITDA margin reached 14.0% and adjusted EPS beat estimates at $3.13, operating income declined across Health, Homeland, and Defense, with Defense hit by a delayed fixed-price development program. The Entrust acquisition added $500 million to the top line and $0.05 to adjusted EPS, but the company did not change its base-business outlook, faces execution, hiring, security-clearance, and cyber risks, and remains exposed to inflation, interest rates, foreign exchange, and pension support risk.