Truist analyst Tobey Sommer thinks Leidos (LDOS)’ acquisition of Entrust is a quality start to what the firm expects to be a busy year for M&A/portfolio shaping at the company. The energy sector is a small but fast-growing and high margin piece of Leidos. Truist likes the deal on overall spending expectations for the utilities industry, immediate expected sales growth/margin accretion, and potential synergy/cross-selling opportunities. The firm also doesn’t see pro forma post-close leverage as an impediment to more near-term M&A activity. Truist has a Buy rating on the shares with a price target of $220.
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