A new Wells Fargo Securities report offers analysts' views on Leidos' (NYSE: LDOS) move to buy the security detection and automation businesses of L3Harris Technologies (NYSE: LHX) for $1B as well as Science Applications International Corp.'s (NYSE: SAIC) plan to acquire the federal unit of Unisys (NYSE: UIS) for $1.2B.
WFS Managing Director Ed Caso and Associate Analyst Justin Donati say they expect investors to take a positive view of the Leidos-L3Harris deal as the Reston, Va.-based contractor also digests another recent $1.65B transaction for Dynetics.
"We remain positive on management and improving positioning, but valuation leads us to maintain our equal weight rating," Caso and Donati wrote in their stock recommendation for Leidos.
Additionally, both equity analysts raised their price target on Leidos from $102 to $110 after the company won the $7.7B services portion of the U.S. Navy's Next Generation Enterprise Network-Recompete contract.
They gave SAIC stock an overweight rating and raised price target from $100 to $105 as the government technology contractor aims to expand its market presence with the pending Unisys Federal business acquisition.