Booz Allen: Strong Fundamentals and Strategic Focus Justify Buy Rating Despite Sector Challenges

In a report released yesterday, Gautam Khanna from TD Cowen maintained a Buy rating on Booz Allen (BAH – Research Report), with a price target of $135.00.

Gautam Khanna has given his Buy rating due to a combination of factors influencing Booz Allen’s stock. The broader sector macros are favorable, with manageable cuts from DOGE and the stock trading at a minimal premium compared to its peers. Although the initial fiscal year 2026 guidance may fall short of consensus expectations, the stock seems to have already accounted for a worse scenario.
Despite the anticipated lag in sales and EPS guidance, Booz Allen’s fundamentals remain strong, with a long-term book-to-bill ratio that justifies the fiscal year 2026 estimates. The company has secured significant contracts recently, and its focus on advanced cyber and AI capabilities has allowed it to outpace peers over the past decade. Although there are concerns about the company’s federal and civil business, these seem to be already reflected in the stock price. The stock has been negatively impacted by perceptions of its government consulting work and broader sector challenges, but it is expected to re-rate higher.