FINWIRES · TerminalLIVE
FINWIRES

Amentum Needs Revenue Growth to Re-rate Higher, Morgan Stanley Says

By

Amentum's (AMTM) fiscal Q3 revenue growth missed estimates, and although profitability continues to improve, revenue growth must accelerate for the stock to re-rate higher, Morgan Stanley said Tuesday in a note.

The company's topline challenges continued as organic revenue growth of 1% fell short of Street expectations of 3%, driven by business delays and protests that led Amentum to lower its fiscal 2026 revenue guidance by 2%, according to the note.

The company's preliminary fiscal 2027 guidance calls for 0% to 1% revenue growth, versus Morgan Stanley's estimate and Street consensus of 4%. Revenue is expected to be impacted by NASA insourcing and select client exits, the note added.

Excluding the NASA headwind and client exits, Amentum expects to achieve mid-single-digit normalized growth in fiscal 2027, according to the firm. However, given the recent headwinds, the brokerage said it will wait for acceleration in growth.

Morgan Stanley believes the company has a "highly attractive and unique" end-market base, including Nuclear Generation, Space, and Critical Digital Infrastructure, accounting for about 30% of its portfolio.

Morgan Stanley kept an equalweight rating on Amentum and lowered its price target to $24 from $30.

Price: $21.98, Change: $-0.45, Percent Change: -2.03%

Related Articles

Wire

Dateline Resources Says US Court Orders Halt to Operations at California Project in Ongoing Case; Shares Reach One-Year Low

Dateline Resources (ASX:DTR) said the US District Court for the Central District of California issued a preliminary order requiring, among other things, that Dateline and its wholly-owned unit, Colosseum Rare Metals, halt operations at the Colosseum project until either a preliminary injunction is lifted or a final judgment is delivered in relation to the National Parks Conservation Association proceedings, according to a Wednesday Australian bourse filing.The non-governmental organization had brought the proceedings in the court against the US Department of the Interior, the US National Parks Service, and various other parties, per the filing. It sought a preliminary injunction restraining activities at the project pending resolution of its challenge to the 2025 National Parks Service's acknowledgement of the continuing effect of the mine's existing plan of operations.Dateline said it is considering the preliminary order and its alternative courses of action, including a potential appeal to the appellate court.The company's shares fell nearly 38% in recent trading and earlier reached their lowest point in over a year.

ASX:DTR
Wire

Franco-Nevada Q2 Adjusted Earnings, Revenue Rise; Shares Drop After Hours

Franco-Nevada (FNV) reported Q2 non-GAAP net income late Tuesday of $1.81 per diluted share, up from $1.24 a year earlier.Analysts polled by FactSet expected $1.96.Revenue in the three months ended June 30 rose to $580.9 million from $369.4 million a year earlier.Analysts expected $616.7 million.The board maintained a quarterly dividend of $0.44 a share, payable Sept. 24 to stockholders of record Sept. 10.The company's shares fell 2.1% in after-hours trading.

$FNV
Wire

ERock Q2 Revenue Falls; 2026 Guidance Set

ERock (EROC), which completed its initial public offering in June, reported Q2 net loss late Tuesday of $0.06 per diluted share. Comparable year-ago details were not provided.Analysts polled by FactSet expected a loss of $0.24.Revenue for the quarter ended June 30 was $39.9 million, down from $68.5 million a year earlier.Four analysts expected $20.4 million.For 2026, the company expects revenue of $435 million to $465 million. Analysts expect $448.3 million.Also, the company highlighted that it executed a 470 megawatt equipment purchase order from Anthropic, extending its production commitments into 2028.

$EROC