Leidos downgraded to Neutral from Buy at Goldman Sachs

Goldman Sachs analyst Noah Poponak downgraded Leidos (LDOS) to Neutral from Buy with a price target of $153, down from $228. Leidos is a near pure play in government services, with just under 50% of revenue attributed to Department of Defense and just under 40% of revenue attributed to federal civilian agencies, the analyst tells investors in a research note. The firm says its variance to consensus estimates has now narrowed, the company faces re-compete risk on the VBA exam business within Health, and the growth and margins of the other segments “has been choppy.” It sees risk to Leidos from lower government spending.