AMTM Stock Forecast & Price Target

Amentum Holdings is a government services contractor that provides engineering and technology solutions to the US government and allied nations, as well as commercial customers. With its diversified exposure across growing end-markets such as defense, civilian, environment, intelligence, and space, as well as its strong incumbency and scale as the largest government services provider, Amentum is well-positioned to weather potential budget cuts and continue its growth trajectory. Additionally, its premature revenue outlook for FY27 raises some concerns around its long-term growth narrative, but its involvement in several major nuclear projects, such as the potential $500 million per reactor opportunity with Westinghouse AP1000 and the $200 million-$300 million per reactor opportunity with Rolls-Royce SMR, provides significant revenue potential in the future. While its revenue in FY26 was lower than expected, Amentum's margins, earnings, and cash flow still exceeded expectations, with impressive growth in its Digital Solutions segment and significant margin expansion in its Global Engineering Solutions segment. However, the preliminary FY27 outlook was slightly lowered, leading to a reduction in its price target, but still placing Amentum in line with its peers and reflecting its historically strong performance.

Amentum Holdings is facing significant macro headwinds, mediocre industry results, and concerns regarding the impact of AI on services businesses. Despite its strong backlog and recent awards, the company's stock is trading nearly 40% below its all-time high and has been negatively affected by these industry trends. However, with a focus on priority areas and a target of under 3x leverage by FYE26, Amentum Holdings has the potential to rebound in the coming years.