Research Alert: CFRA Reiterates Sell Rating On Science Applications International Corporation
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We increase our target by $20 to $100 on a P/E of 9.2x our FY 28 (Jan.) EPS view, below historical (13.6x) and peers (12.6x), reflecting lower revenue expectations. We raise our FY 27 EPS estimate to $10.13 from $9.50 and FY 28's to $10.90 from $10.65. Management raised FY 27 guidance across key profitability metrics while maintaining revenue expectations, reflecting confidence in margin sustainability but continued caution on top-line growth. Adj. EBITDA guidance increased to $720M-$730M from $705M-$715M, with margin guidance raised to 10.1%-10.3% from 9.9%-10.1%. Adj. diluted EPS guidance was lifted to $9.90-$10.10 from $9.50-$9.70. However, revenue guidance remained unchanged, implying organic declines of 2%-4% for FY 27, suggesting a cautious outlook on the procurement environment despite the quarter's stabilization.Before becoming more constructive, we need to see sustained strong bookings drive top-line growth, proving SAIC can execute its portfolio pivot and offset significant recompete headwinds.
