Executive Mosaic’s GovCon Index claimed its first winning week in February despite closing -0.44% lower at $4,507.36 before the weekend. The index, which tracks the stock performances of 30 major government contractors, gained +0.27% week-on-week. However, the month-on-month and year-to-date losses are -7.92% and -6.83%, respectively.
It was a turbulent week on Wall Street, although the Dow Jones Industrial Average (+1%) salvaged a gain. The tech-heavy Nasdaq Composite (-3.5%) and broader S&P 500 (-1%) posted weekly losses despite the comeback from Thursday’s selloff. Still, all three major U.S. indexes are positive for the year.
Winners and losers
BAE Systems stood out on the GovCon Index, advancing +12.61% in five days. V2X (NYSE: VVX) is close second with +11.5% following the +15.74% breakout on Tuesday. ICF International (Nasdaq: ICFI) was the week’s worst performer, losing -20.83% in one week and -20.72% on Friday. Palantir Technologies (Nasdaq: PLTR), the second worst performer, tanked -16.21%.
British aerospace and defense firm BAE Systems will likely benefit from higher defense spending in Europe. It reported record sales of $35.6 billion in 2024 and forecasts revenue and profit growth of 9% and 8% in 2025.
On Thursday, BAE Systems announced that it will construct the spacecraft bus for the forthcoming Space Weather Next L1 Series mission for the National Oceanic and Atmospheric Administration. L1 Series is the latest heliophysics mission it is building for NASA and NOAA in addition to the Space Weather Follow-On L1 or SWFO-L1. The launch date is 2029.
Canaccord Genuity analysts downgraded ICF to hold from buy and lowered its price target from $200 to $100. The financial services firm said ICF’s core federal segment business is under unprecedented pressure and faces uncertainty under the Trump administration. The stock trades at $79.26 per share.
High-flying AI stock Palantir Technologies fell below $100 to start the week. Market analysts said industry-specific growth outlooks and macroeconomic concerns caused the pullback.
Review of consulting contracts
The General Services Administration has encouraged agencies to cut “non-essential” consulting contracts. Six of the 10 targets and highest paid consulting firms are GovCon Index constituents, including Booz Allen Hamilton (NYSE: BAH) and Leidos (NYSE: LDOS).
In a letter to agency senior procurement executives, Stephen Ehikian, acting GSA administrator, said, “By March 7, please provide us with a list of the contracts with these firms that your agency intends to terminate and those that it intends to maintain.”
