What Happened?
Shares of government engineering solutions provider Amentum Holdings (NYSE: AMTM) jumped 3.2% in the morning session after the company received price target upgrades from multiple Wall Street analysts, including BofA Securities and Goldman Sachs. BofA Securities raised its price target to $27 from $26, highlighting the market premium given to Amentum for its 'nuclear exposure.' This refers to the company's work in the nuclear market, which is increasingly seen as a key solution for powering energy-intensive artificial intelligence (AI) data centers. Goldman Sachs also boosted its price target to $26 from $21. While BofA maintained a Neutral rating, it acknowledged Amentum's diverse portfolio and improving free cash flow. The positive analyst actions add to recent reports of growing interest from institutional investors, signaling broader confidence in the company's strategic positioning.
After the initial pop the shares cooled down to $26.43, up 3.1% from previous close.
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What Is The Market Telling Us
Amentum’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 3.3% on the news that the company reported third-quarter financial results that included a significant miss on GAAP earnings per share, even as revenue surpassed expectations. The government engineering solutions provider announced revenue of $3.56 billion, which edged past analysts' forecasts. However, the company's GAAP profit of just $0.04 per share fell 73.3% short of consensus estimates. GAAP, or Generally Accepted Accounting Principles, is a standard method for financial reporting. While the firm's adjusted earnings, which excluded certain one-time items, did top expectations, investors appeared to focus on the substantial miss in standard profitability. The company also slightly lifted its revenue guidance for the full year.
Amentum is up 22% since the beginning of the year, but at $26.43 per share, it is still trading 20.9% below its 52-week high of $33.40 from November 2024. Investors who bought $1,000 worth of Amentum’s shares at the IPO in September 2024 would now be looking at an investment worth $895.61.
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