Group 1 - Leidos Holdings, Inc. (NYSE:LDOS) is recognized as one of the best cybersecurity stocks to buy in 2026, but analysts have recently lowered their price targets, with TD Cowen reducing it from $210 to $190 and UBS from $216 to $204 while maintaining a Hold rating [1][2] - The demand for Leidos' Veterans Benefits Administration medical exam business remains strong; however, increased competition from a fourth provider poses a threat to the company's market position, especially with major contracts up for rebid in 2027 [2][3] - UBS anticipates headwinds for Leidos in 2026, projecting that margins will remain below consensus but above the long-term historical average, indicating potential challenges ahead for the company [3] Group 2 - The Veterans Benefits Administration is a significant contributor to Leidos' profits, meaning any negative impact from increased competition could substantially affect earnings [2] - The company specializes in digital modernization, cybersecurity, logistics, and defense and mission systems for federal agencies, military, and intelligence clients, positioning it within a critical sector of government contracting [3]

Core Insights - Leidos Holdings Inc. is recognized as one of the top defense stocks in Goldman Sachs' portfolio, benefiting from diversified revenue exposure across various end-markets and steady demand for systems solutions, IT, cyber, and logistics support from defense and civil agencies [1] Company Developments - On October 8, Leidos announced an expansion of its partnership with Kazaeronavigatsia to modernize Kazakhstan's air traffic control infrastructure, involving work at four control centers and 21 towers, positioning the company to benefit from projected growth in air traffic volume in Kazakhstan [2] - Truist Securities analyst Tobey Sommer raised the price target for Leidos to $195 from $188, maintaining a Buy rating ahead of the company's Q3 results scheduled for November 4 [3] Market Outlook - Analysts note potential near-term volatility for government services companies due to weaker book-to-bill ratios, a government shutdown, and delays in federal budget resolutions, but these factors may present buying opportunities for long-term investors [4] - Order growth and new contract awards are expected to increase in the first half of 2026, with stronger organic growth anticipated between late 2026 and early 2027, despite short-term political uncertainties [5] Company Profile - Leidos Holdings Inc. operates as a U.S. government technology and defense contractor, focusing on digital modernization, cybersecurity, logistics, and defense and mission systems for federal agencies, military, and intelligence clients [6]