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Research Alert: CFRA Upholds Sell Rating On Shares Of Booz Allen Hamilton Holding Corporation

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our target price to $70 from $72, applying a 10.4x P/E to our FY 28 (Mar.) EPS estimate vs. BAH's three-year historical forward P/E average of 20.9x, reflecting a de-rated government services industry. We maintain our FY 27 EPS at $6.03 and FY 28's at $6.70. Our revenue projections are $11.43B (+2%) in FY 27 and $11.77B (+3%) in FY 28. Management's underwhelming FY 27 guidance reinforces our cautious outlook, as its revenue growth midpoint of 2% and EPS midpoint of $6.18 both fall short of consensus expectations of 3% and $6.25, respectively. We expect Civil to shrink by high-single-digits, acting as a significant drag on overall performance and pressuring the business mix. Furthermore, we believe the reputational damage from the U.S. Treasury contract terminations creates an ongoing overhang that could hinder new business wins. These combined headwinds, a structurally impaired Civil business and lingering reputational risk, validate our view that the stock warrants a discounted valuation multiple.

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