DA Davidson has adjusted its valuation of Booz Allen Hamilton (NYSE:BAH), raising the price target to $81.00 from $73.00 but keeping a Neutral recommendation on the stock. InvestingPro data referenced in the report shows a current market capitalization of $11.33 billion and a share price of $93.93, with the company flagged as trading below its Fair Value despite a trailing price-to-earnings ratio of 13.75.
The analyst note highlighted several asset-quality metrics. Non-performing assets (NPAs) declined by 1 basis point from the prior quarter to 6 basis points of total assets. Net charge-offs (NCOs) to average loans rose to 12 basis points and are reported at 10 basis points for the full year. The firm also described a $2.5 million loan loss provision that was $1.0 million lower than DA Davidson's model projected; net charge-offs more than offset that smaller-than-expected provision, which reduced loan-loss reserves to $146.8 million, or 1.04% of loans.
On capital allocation, DA Davidson notes that Booz Allen repurchased 76,500 shares during the quarter for a total of $5.0 million, leaving $121.0 million available under the existing buyback authorization. The report says the bank intends to step up repurchases if growth remains subdued. InvestingPro data appended to the report indicates management has been active in buybacks, while also maintaining a 2.34% dividend yield and having increased dividends for 10 consecutive years.
DA Davidson raised its earnings-per-share estimates for fiscal 2026 and 2027, moving forecasts from $5.50 and $5.90 to $6.10 and $6.75, respectively. The analyst cited an improved outlook for net interest income that is partly offset by higher expense assumptions. InvestingPro assigns the company a 75% return on common equity and an overall financial health grade of "GOOD" in its analysis of more than 1,400 U.S. equities.
Recent company results provide a mixed picture. Booz Allen reported third-quarter fiscal 2026 earnings per share of $1.77, beating the projection of $1.29 by a 37.21% surprise. Revenue for the same quarter, however, came in at $2.6 billion versus an expected $2.76 billion, representing a 10% decline from the prior year.
Complicating the operational backdrop, the U.S. Treasury Department canceled all contracts with Booz Allen, citing data security concerns. That action affected 31 contracts, accounting for $4.8 million in annual spending and $21 million in total obligations.
In parallel coverage, Truist Securities raised its price target on Booz Allen to $98 from $90 and maintained a Hold rating. Truist pointed to tax-related benefits and expected cost reductions as drivers behind its revised target and updated EPS projections for fiscal years 2027 and 2028.
Overall, DA Davidson's revision to the price target and to multi-year EPS forecasts reflects a reassessment of interest income prospects and continued capital returns to shareholders, set against revenue weakness and contract-related disruptions documented by recent results and government action.
Takeaways
- DA Davidson increased the price target to $81 while keeping a Neutral stance.
- Asset-quality metrics show marginal NPA improvement, higher NCOs, and reserves drawn down to $146.8 million (1.04% of loans).
- Management continues buybacks and a long-running dividend-growth policy, with $121.0 million of repurchase authority remaining.
Context and outlook
The analyst upgrade to EPS forecasts for 2026 and 2027 is grounded in a stronger net interest income outlook, although DA Davidson also builds in higher expense assumptions. The firm's Neutral rating alongside a higher target price underscores a balance of upside from capital-management actions and downside from near-term revenue softness and contracting risks.
Note on data
All figures and statements above are taken from the analyst report and InvestingPro metrics referenced in DA Davidson's coverage and the company’s reported quarterly results.