On Tuesday, Wells Fargo adjusted its outlook on Booz Allen Hamilton (NYSE:BAH), a prominent management and information technology consulting firm, by increasing the price target to $169 from the previous $158. The firm maintained an Equal Weight rating on the stock.
The revision follows the company's initial fiscal year 2025 guidance, which surpassed the long-term projections of 5-8% growth. Booz Allen Hamilton's adjusted EBITDA margins are expected to be around 11%, approximately 50 basis points ahead of prior expectations. This performance suggests there might be further upside as the year progresses.
In light of the updated forecasts, Wells Fargo has also revised its earnings per share (EPS) estimate for fiscal year 2025 to $6.26, up from $5.95. Expectations for fiscal year 2026 have similarly been adjusted, with EPS estimates increasing to $6.76 from the previous $6.60.
The new price target of $169 is based on a 25x multiple on Wells Fargo's fiscal year 2026 EPS estimate. This valuation aligns with the current trading levels of Booz Allen Hamilton shares, which are nearing all-time highs. Wells Fargo's analysis suggests that while the stock's growth and margin outlook appear positive, they recommend waiting for a more attractive entry point into the market.
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