Leidos rises 1.5% after completing Analogic joint venture deal

What happened

Leidos (LDOS) rose 1.5% on October 5, 2026, after completing a transaction that combined several of its security and industrial businesses into a privately held Analogic joint venture. Business Wire and PRNewsWire reported the deal combined Leidos’ Security Enterprise Solutions, Ports & Borders and Industrial Automation businesses with Analogic Corporation and Altaris to form a scaled U.S.-based company operating under the Analogic brand.

The new entity is focused on advancing security screening for airports, borders and critical infrastructure worldwide, according to the filings and the press releases. The transaction was the main development around the company that day; it should not be presented as the sole cause of the stock’s price change.

How big was the move

Leidos closed at $119.45, a rise of 1.5% on the day and a five-session change of down 2.4%. Trading volume was 1.2 times its 20-day average, a sign investor attention was above average that session. The S&P 500 rose 0.7% and the Technology sector median rose 0.2%; the stock’s gain was 1.3 percentage points better than the sector median.

The size of the move equated to 0.6 times a typical daily move for this stock, indicating a normal-sized session. Market sensitivity remained muted: the stock has a beta of 0.81, meaning it tends to move less than the market.

The technical picture

Technically, the stock sat well below its key averages. The stock was 5.0% below its 20-day moving average, 8.6% below its 50-day average and 18.7% below its 200-day average. The 50-day average was below the 200-day average, a sign of a weak longer-term trend.

Momentum measures were subdued. The relative strength index over 14 days was 36, inside a neutral range between 30 and 70. The stock was 41.9% below its 52-week high and had fallen 9.8% over one month while rising 10.0% over three months.

Over one year, the stock fell 38.1% and was 53.8 percentage points behind the S&P 500. Volatility was elevated at 38% annualized over 60 days, higher than 84% of its own readings over five years, underscoring larger-than-normal price swings recently.

Fundamentals and valuation

Over the four quarters through July 3, 2026, Leidos reported revenue of $17.63 billion, up 3.4% from a year earlier, and diluted earnings per share of $10.72, an increase of 1.3% year over year. Gross margin was 17.4%, down from 17.6% a year earlier, and operating margin was 11.5%, down from 12.0% a year earlier.

Free-cash-flow margin stood at 12.3% and return on invested capital was 14.4%. The company’s balance sheet showed net debt of 2.5 times EBITDA, and share count decreased by 2.3% over one year.

On valuation, the stock traded at 11.1 times trailing earnings, the lowest reading of the past five years against a five-year median of 18.7 times, and at 9.6 times expected forward earnings. Free-cash-flow yield was 14.6%, making the stock appear inexpensive on cash-return measures.

PromtFinance scores rank the company highly on value at 99, while momentum is weak at 13 and revisions are positive at 71, suggesting mixed near-term signals despite deep value metrics.

Earnings and analyst expectations

Leidos last reported on August 4, 2026, posting earnings per share of $3.26 against $2.91 expected, a beat of 12.0% above estimates. That marked the thirteenth consecutive quarter the company beat consensus and the average surprise over the last four reports was 9.6% above estimates. Typical two-day reactions to recent reports saw the stock rise 1.9%.

The next report is scheduled for November 3, 2026. Twenty-eight analysts covered the stock, with a consensus price target of $152.75, which is 27.9% above the closing price. Sixty-one percent of ratings were Buy or higher and the consensus rating was Buy.

What to watch

• November 3, 2026: next quarterly earnings report
• The integration progress and operating results of the newly formed Analogic joint venture, announced via Business Wire and PRNewsWire
• Changes in net debt relative to EBITDA and any balance-sheet moves tied to the transaction
• Analysts’ revisions following the joint venture closing and ahead of the next earnings date
• Movement in the consensus price target and the mix of analyst ratings