Baird downgraded Leidos (LDOS) to Neutral from Outperform with a price target of $163, down from $176. The firm believes headline risk across government services names is set to continue in the coming months, coupled with a weaker bookings’ environment that started to emerge since Q1. Baird’s checks are showing meaningful contract terminations in Q2, weak government outlays through April, and shadow backlog erosion tied to recent IDIQ contract terminations. It believes this bookings environment warrants caution on Leidos shares.
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