Amentum initiated with an Outperform at Raymond James

Raymond James initiated coverage of Amentum (AMTM) with an Outperform rating and $30 price target. Amentum was created through the Reverse Morris Trust transaction between Amentum and the CMS segment of Jacobs (J) that was spun off in 3Q24, creating the second-largest public provider of government services as measured by revenue with global delivery capabilities, the analyst tells investors in a research note. The combined entity should grow low single digits to mid single digits organically, post more than 100 basis points of EBITDA margin expansion, and generate significant free cash flow as it de-levers over 24 months, Raymond James says.