What Makes Leidos (LDOS) a New Strong Buy Stock

Core Viewpoint - Leidos (LDOS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook driven by an upward trend in earnings estimates, which significantly influences stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of changing earnings estimates, which are closely correlated with near-term stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [3][5]. - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional investors to buy or sell, thus affecting stock prices [3]. Business Improvement Indicators - Rising earnings estimates and the Zacks rating upgrade for Leidos suggest an improvement in the company's underlying business, which is expected to be reflected in higher stock prices [4][9]. Earnings Estimate Revisions for Leidos - Leidos is projected to earn $11.28 per share for the fiscal year ending December 2025, with no year-over-year change; however, the Zacks Consensus Estimate has increased by 5.9% over the past three months [7]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988, indicating a strong performance potential [6][8]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, positioning Leidos among the best candidates for market-beating returns in the near term [9].