V2X initiated with a Buy at Citi

Citi initiated coverage of V2X (VVX) with a Buy rating and $64 price target The firm is constructive on the outlook for defense spending given the geopolitical backdrop and expects efficiency efforts by the incoming U.S. administration to potentially lead to more outsourcing should government headcount shrink. Further, Citi expects continued revenue synergies from a recent merger as the company combines an installed base with additional capabilities to sell, and notes that it recently hired a new Chief Growth Officer to focus its efforts. Margins look stable but low risk, at this point, given revenue visibility, and recompete risk also appears low relative to competitors over the next 6 to 8 quarters, the firm adds. All of this is set against compelling valuation, in Citi’s view.