RESTON, Va. - Defense contractor Leidos Holdings , Inc. (NYSE: NYSE:LDOS), a prominent player in the Professional Services industry with a market capitalization of $19.5 billion, has been awarded a significant contract by the U.S. Air Force Life Cycle Management Center, the company announced today. The contract, valued at a maximum of $987 million, tasks Leidos with providing engineering and sustainment services for the F-16 Fighting Falcon aircraft operated by Foreign Military Sales (FMS) customers. According to InvestingPro analysis, Leidos has demonstrated strong performance with a 36% year-to-date return and maintains a "GOOD" overall financial health rating.
This indefinite delivery, indefinite quantity contract, with a 10-year period of performance, is designed to ensure the operational readiness and enhancement of the F-16 weapon system, a platform that has been adopted by over 25 nations worldwide. The F-16 fleet currently comprises approximately 2,200 active aircraft globally. InvestingPro subscribers can access 8 additional exclusive ProTips about Leidos, including insights on dividend history and growth potential.
Leidos' role will include post-production support through critical engineering services and the sustainment of the aircraft. A key component of the contract is the implementation of Leidos' Web Based Management System, which aims to provide real-time visibility of repair asset tracking status, thereby streamlining the repair and return lifecycle.
Roy Stevens, Leidos National Security Sector president, highlighted the company's use of artificial intelligence and predictive analytics in creating a data-informed platform that will increase efficiency, visibility, and accountability for their customers.
The announcement of this contract aligns with Leidos' broader mission to serve government and commercial customers with innovative digital and mission solutions. The Reston, Virginia-based company, employing 48,000 people globally, reported annual revenues of approximately $15.4 billion for the fiscal year ended December 29, 2023. Based on InvestingPro's Fair Value analysis, Leidos appears undervalued, with analysts projecting EPS of $10.22 for fiscal year 2024. Detailed analysis and comprehensive research reports covering Leidos and 1,400+ other US stocks are available exclusively to InvestingPro subscribers.
The information is based on a press release statement, and it should be noted that the U.S. Department of Defense does not endorse the company's products or services. This contract represents Leidos' continued commitment to supporting the U.S. Air Force and its allies, ensuring interoperability and resilience of critical defense systems.
In other recent news, Leidos Holdings has been the recipient of several major contracts and financial adjustments. The company has secured a $107 million contract from the National Geospatial-Intelligence Agency to supply geospatial intelligence products. This contract is expected to support a range of mapping and analysis activities. Furthermore, Leidos has secured three new contracts from the Defense Information Systems Agency totaling over $30 million, and a potentially $235 million contract to modernize the Organ Procurement and Transplant Network.
Despite these positive developments, Goldman Sachs has downgraded Leidos' shares from Buy to Neutral, revising the price target to $153. However, both UBS and JPMorgan have initiated coverage on Leidos with a Neutral rating, with JPMorgan revising its price target to $205, up from $185.
Leidos has reported strong Q3 2024 results, marking its sixth consecutive quarter of growth with a 7% revenue increase, reaching $4.19 billion. Consequently, the company has raised its 2024 revenue guidance to between $16.35 billion and $16.45 billion. These are the recent developments that continue to shape Leidos' business operations.
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