Core Insights - Leidos is continuing its partnership with Hawai'i's Public Utilities Commission to enhance energy efficiency, reduce carbon emissions, and improve energy resiliency in the state [1][4] Contract Details - A new three-year contract worth $127 million has been established for Leidos to manage the Hawai'i Energy program and the Electric Vehicle Charging Station Rebate program, along with market solutions and educational initiatives [2] Achievements and Impact - Since 2009, Leidos has administered the Hawai'i Energy program, resulting in over $7 billion in energy savings statewide. In the last program year, it provided more than 18,000 rebates totaling approximately $20 million [3] Strategic Alignment - The partnership aligns with Leidos' NorthStar 2030 strategic focus on energy infrastructure and reflects its commitment to advancing energy efficiency and grid modernization across the nation [4] Company Overview - Leidos is a leader in industry and technology, serving government and commercial customers, with annual revenues of approximately $16.7 billion for the fiscal year ending January 3, 2025 [5]

Core Thesis - Amentum Holdings, Inc. is positioned as a leading government technology contractor following its merger with Jacobs Solutions, creating a scaled entity with significant revenue and backlog [2][3] Company Overview - Amentum provides engineering and technology solutions to U.S. and allied government agencies, with a pro forma revenue near $14 billion and a backlog exceeding $44.6 billion [2][3] - The company has over 53,000 employees across 80 countries, enhancing its competitive positioning against Tier 1 incumbents like Leidos and Booz Allen Hamilton [3] Financial Metrics - As of November 28th, Amentum's share price was $28.63, with trailing and forward P/E ratios of 106.04 and 12.03 respectively [1] - The market currently undervalues Amentum, pricing it at a forward P/E of 10.4x, reflecting a typical "conglomerate discount" [5] - The company has an Owner Earnings yield of 10.8%, indicating strong free cash flow generation and deleveraging potential [6] Strategic Initiatives - Key value drivers include anticipated cost synergies of $50–70 million, aggressive debt paydown, and expansion of the Digital Solutions segment, which has shown 8% EBITDA margins [5] - Recent contract wins, including a $946 million U.S. Army contract and $350 million in digital task orders, validate the strategic rationale behind the merger [6] Growth Potential - With net leverage improving to 3.5x and a strong pipeline, Amentum presents a compelling risk/reward profile, with potential stock valuation reaching mid-$30s or even $42 with successful growth [7] - The combination of stable revenue, high free cash flow, and operational scale makes Amentum an attractive investment opportunity in the government technology sector [7] Historical Performance - Amentum's stock price has appreciated approximately 53.34% since March 2025, reflecting the successful execution of the bullish thesis on the company [8]

Group 1 - KBR Inc. is considered one of the most undervalued stocks on the NYSE, with a recent price target adjustment by BofA from $55 to $45 while maintaining a Neutral rating [1] - In Q3 2025, KBR secured several contracts, notably a $2.5 billion contract with NASA, and reported earnings of $1.02 per share, exceeding estimates by $0.07 [2] - Despite contract wins, KBR's quarterly revenue was flat year-over-year at $1.93 billion, reflecting a modest decline of approximately 0.8% and missing estimates by $42.07 million [2] Group 2 - The Sustainable Technology Solutions segment faced challenges due to delays in LNG project development and cancellations of some petrochemical projects [3] - The Readiness and Sustainment segment experienced a significant revenue decline of 22% due to strategic shifts and cost reductions by the Department of Defense [3] - KBR operates through two main segments: Government Solutions and Sustainable Technology Solutions, providing scientific, technology, and engineering solutions globally [4]

Financial Performance - Revenue remained flat year-over-year at $1.9 billion[9], attributed to challenges in converting pipeline opportunities due to delays and protests[12] - Adjusted EBITDA increased by 10% to $240 million[10], with an adjusted EBITDA margin expansion of 112 bps year-over-year, reaching 12.4%[11] - Year-to-date operating cash flow (OCF) increased by 24%[31], with a conversion rate of 133% due to reductions in Days Sales Outstanding (DSO) in both segments[32] - The company is guiding for full-year 2025 revenues of $7.75 billion to $7.85 billion, adjusted EBITDA of $960 million to $980 million, and adjusted EPS of $3.78 to $3.88[41] Strategic Initiatives and Backlog - The company achieved a QTD book-to-bill ratio of 1.4x and a TTM book-to-bill ratio of 1.0x[16] - Total backlog and options stand at $23.4 billion[16] - Mission Tech QTD book-to-bill is 1.4x with a backlog and options of $19.7 billion[21] - Sustainable Tech QTD book-to-bill is 1.2x with a backlog of $3.7 billion[21] Spin-Off - The spin-off is progressing well and is expected to close in mid-to-late 2026[13, 43] - Post-spin-off, New KBR (comprising STS) TTM Q3'25 Revenues is $2.2 billion with Adj EBITDA margin of 22.3% and backlog of $3.7B[44, 45] - Post-spin-off, SpinCo (comprising MTS) TTM Q3'25 Revenues is $5.8 billion with Adj EBITDA margin of 9.9% and backlog & options of $19.7B[44, 45]

Core Insights - KBR Inc. has been awarded a significant contract from the United States Space Force with a ceiling value of $98.7 million for a period of 3 years [1][2][3] - The contract, named the Design Implementation for Collaborative Environment (DICE) task order, aims to create a state-of-the-art testing and training environment for the USSF in Colorado Springs, Colorado [2][3] - KBR will utilize its Integration Accelerator, a digital engineering ecosystem, to enhance decision-making and accelerate capability deployment under this contract [3] Company Overview - KBR Inc. provides scientific, technology, and engineering solutions to both government and commercial clients globally [4] - The company operates through two main segments: Government Solutions and Sustainable Technology Solutions [4]

Core Insights - Technip Energies has been awarded two engineering services contracts by Repsol for the Ecoplanta project, a pioneering waste-to-methanol facility in El Morell, Spain [1][4] - The facility will be the first in Europe to convert non-recyclable municipal solid waste and biomass into renewable methanol at scale, contributing to CO2 emissions reduction and supporting circular economy goals [2][6] - The project is expected to process up to 400,000 tons of municipal waste annually, producing approximately 240,000 tons of methanol, which can be used for manufacturing circular materials and advanced biofuels [3][5] Company Involvement - Technip Energies will provide engineering and procurement services, overseeing the integration of Enerkem's gasification technology, which transforms non-recyclable waste into renewable fuels [5][7] - The contracts will be recorded in the Q3 2025 backlog within the Technology, Products & Services segment, highlighting the company's commitment to sustainable solutions [7] Financial and Environmental Impact - The project is co-funded by the European Union's Innovation Fund and is projected to reduce greenhouse gas emissions by 3.4 million tons of CO2-equivalent over its first decade of operation [6] - Technip Energies generated revenues of €6.9 billion in 2024, indicating a strong financial position to support innovative projects like Ecoplanta [9]

Core Viewpoint - KBR, Inc. plans to pursue a tax-free spin-off of its Mission Technology Solutions (MTS) segment, aiming to create two independent public companies with enhanced strategic focus and operational independence [1][2][11]. Strategic Rationale and Benefits - The spin-off is expected to position both New KBR and SpinCo for long-term profitable growth and value creation, leveraging their distinct product and service offerings [2][5]. - KBR's transformation over the past decade has established it as a leading provider of innovative science, technology, and engineering solutions [2][6]. - Post-spin, both companies will retain KBR's values-driven culture and focus on delivering customer value [2][4]. New KBR (Sustainable Technology Solutions - "STS") - New KBR will focus on sustainable technology solutions, delivering proprietary technologies that reduce emissions and enhance energy efficiency [3][4]. - The company will leverage over 85 process technologies across various markets, including ammonia/syngas and clean refining [4][6]. SpinCo (Mission Technology Solutions - "MTS") - SpinCo will serve as a leader in government services, focusing on national security and space priorities, benefiting from increasing budgets [7][8]. - The company is expected to maintain a capital-light model with diversified, long-duration contracts, ensuring predictable cash flow and a robust backlog [8]. Executive Leadership Updates - KBR has engaged a search firm to identify executive candidates for SpinCo, with Mark Sopp transitioning to oversee the spin-off process [9][10]. - Shad Evans has been appointed as KBR's Chief Financial Officer, effective January 5, 2026, and will assume the CFO role for New KBR post-spin [14]. Transaction Details - The spin-off is targeted for completion by mid-to-late 2026 and is intended to be tax-free for KBR and its shareholders [11][12]. - The transaction will require final approval from KBR's Board of Directors and other customary conditions [11]. Fiscal Year 2025 Outlook - KBR reaffirms its previously issued fiscal year 2025 outlook, indicating stability in its financial projections [12].

Group 1 - Amentum Holdings Inc. (NYSE:AMTM) is currently considered one of the best new stocks to buy, with Morgan Stanley raising its price target to $20 from $19 while maintaining an Underweight rating [1] - The company reported Q3 2025 earnings with a revenue of $3.561 billion, reflecting a 66% year-over-year increase [1][2] - Amentum achieved a net income of $10 million, a significant improvement from a net loss of $26 million year-over-year, with a diluted EPS of $0.04 compared to a loss per share of $0.29 in 2024 [2] Group 2 - Digital Solutions revenues increased by 12% year-over-year to $1.421 billion, driven by new commercial contract awards, leading to a 21% increase in Adjusted EBITDA to $114 million [3] - Global Engineering Solutions' revenues decreased by 3% to $2.140 billion due to the expected ramp-down of certain programs, with a corresponding 2% decrease in Adjusted EBITDA to $160 million [3] Group 3 - Amentum Holdings provides engineering and technology solutions to the US and allied government agencies, although there are suggestions that certain AI stocks may offer greater upside potential with less downside risk [4]

Core Insights - KBR, Inc. reported strong financial performance in the first quarter of fiscal 2025, with significant increases in revenues, net income, and adjusted EBITDA compared to the same period in fiscal 2024 [2][3][5] Financial Performance - Revenues reached $2.1 billion, reflecting a 13% increase or $237 million year-over-year, driven by growth in Defense & Intel and Sustainable Technology Solutions [4][7] - Operating income was $195 million, up 17% or $29 million, primarily due to increased gross profit and equity in earnings from unconsolidated affiliates [8] - Net income attributable to KBR was $116 million, a 25% increase or $23 million compared to the previous year [8] - Adjusted EBITDA was $243 million, up 17% or $36 million, with an adjusted EBITDA margin of 11.8% [9][10] Earnings Per Share - Diluted earnings per share (EPS) were $0.88, up 28% or $0.19, while adjusted EPS was $0.98, a 27% increase or $0.21 [9][10][46] Shareholder Returns - The company returned $176 million in capital to shareholders during the quarter, including $156 million in share repurchases and $20 million in dividends [20][19] Segment Performance - Mission Technology Solutions (MTS) revenues were $1,505 million, up 14% or $180 million, driven by the LinQuest acquisition and increased demand in Readiness & Sustainment [13] - Sustainable Technology Solutions (STS) revenues were $550 million, up 12% or $57 million, attributed to rising demand for sustainable technologies [16] Backlog and Bookings - Backlog and options totaled $20.5 billion, with a book-to-bill ratio of 1.0x for the quarter and 1.1x on a trailing-twelve-month basis [10][12] Fiscal Year Guidance - KBR reaffirmed its fiscal year 2025 guidance, projecting revenues between $8.7 billion and $9.1 billion, adjusted EBITDA between $950 million and $990 million, and adjusted EPS between $3.71 and $3.95 [21][22]