Leidos Holdings, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Gavin Parsons from UBS maintained a Hold rating on the stock and has a $216.00 price target.
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Gavin Parsons has given his Hold rating due to a combination of factors tied to Leidos’s Veterans Benefits Administration (VBA) medical exam business. His analysis shows that while overall demand for exams is expanding and funding remains robust, the entry of a fourth provider is eroding Leidos’s share of new obligations and intensifying competition. This added competitor heightens the risk that Leidos is currently benefiting from unusually strong conditions that may not be sustainable, particularly as large portions of the work come up for rebid in 2027, potentially pressuring pricing and profitability.
Parsons estimates that the VBA operations are a disproportionately large contributor to Leidos’s profit, making any slowdown or margin compression in this area a meaningful drag on company-wide earnings. His base-case modeling implies a notable EBITDA headwind in 2026 and a likely step down from current consensus margin expectations, even though margins would still remain above the firm’s long-term average and management has some mitigation levers. At the same time, non-VBA Health & Civil bookings appear softer, reinforcing his view that the current earnings profile may be at risk of normalization. Balancing still-solid fundamentals and funding against rising competitive and margin pressures, Parsons judges that the risk/reward profile is neither compellingly positive nor negative, supporting a Hold stance on the shares.
In another report released on January 8, Stifel Nicolaus also downgraded the stock to a Hold with a $220.00 price target.