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“Risk to Margins”: Booz Allen (NYSE:BAH) Takes Another Hit from Analysts

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Booz Allen takes another hit as Goldman Sachs analysts come out against it.

“Risk to Margins”: Booz Allen (NYSE:BAH) Takes Another Hit from Analysts

More bad news arrived for contracting stock Booz Allen (BAH), as Goldman Sachs analysts took a closer look at the stock. Said analysts did not like what they found therein, and said as much. This latest pan to Booz Allen’s future sent shares sliding down over 4% in Wednesday afternoon’s trading.

Don’t Miss TipRanks’ Half-Year Sale

Goldman Sachs, via analyst Noah Poponak—who has a four-star rating on TipRanks—dialed back the rating on Booz Allen from Neutral to Sell. Poponak also cut the price target on Booz Allen from $108 to $94, which suggests a 14% downside against Tuesday’s closing figures.

While Booz Allen shares have already slid around 15% this year so far, reports noted, Poponak believes that the bleeding is not yet done, noting “…limited revenue and earnings growth over the medium-term, while valuation still has downside risk.” It got worse from there; the federal budget cutting has hit Booz Allen particularly hard, as the Department of Government Efficiency (DOGE) continues to run roughshod over budgets, hitting defense contractors like Booz Allen particularly hard.

Concerning Developments

Meanwhile, on the recent earnings call, president and CEO Horacio Rozanski got involved to talk about some of the changes that are hitting government procedures, the kinds of things that would directly impact Booz Allen’s future going forward. Rozanski noted that there would likely be more “…fixed-price and outcome-based contracts,” as well as “…an increased focus on updating legacy systems and integrating advanced technologies, including artificial intelligence.”

Rozanski seems hopeful that the relationships that Booz Allen has built with the General Services Administration (GSA) would insulate it from a lot of potential cutbacks and difficulties. Rozanski specifically pointed to one key fact to help it: “They now understand the value we deliver across a full range of missions.” This will hopefully paint Booz Allen as a one-stop shop, and thus, a greater potential value for contracts.

Is Booz Allen Stock a Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on BAH stock based on five Buys, six Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 28.9% loss in its share price over the past year, the average BAH price target of $133.40 per share implies 26.71% upside potential.

See more BAH analyst ratings

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