BofA Securities, a brokerage, has upgraded its rating on defense company V2X to “buy,” arguing that the $4.3 billion government contract it won in early August is “just the beginning.” The stock surged on the news.
Details
BofA Securities analyst Mariana Perez Mora yesterday, August 13, upgraded shares of V2X from "hold" to "buy" and boosted her target price from $55 to $65 per share, Barron's reported. This implies upside of 8% versus the closing price yesterday.
Earlier this month, the company announced it had won a $4.3 billion contract from the U.S. Air Force, which Perez Mora called "just the beginning." V2X is "moving up the food chain and taking part in higher-growth, higher-margin work. We think this combination will result in accelerating and sustainable growth in the years to come and, thus, [valuation] re-rating," she said.
"We see V2X’s recent contract takeaway as a sign of its ability to win in its core logistics and operations and maintenance work," Perez Mora argues, as quoted by Barron's.
Market reaction
The upgrade drove a rally in V2X shares, which added more than 10% yesterday to $60.17 apiece. In early trading today, the stock has gained another 3% as of this writing.
Since the start of the year, the company’s share price has risen over 25%, with most of the gain occurring in August. The previous surge, an 18% jump, came on August 5, the day after V2X reported its second-quarter results. Revenue was about flat year over year at $1.08 billion, while adjusted net income rose 61% to $42.3 million.
At the same time, the company raised its 2025 adjusted EPS forecast to $4.65-4.95, up from $4.45-4.85.
On August 5, a Stefel analyst increased his target price for V2X by 14.5% to $63 per share, while maintaining his "buy" rating, according to Yahoo Finance.
MarketWatch data shows the stock has eight “buy” ratings, one “hold,” and two “sells.” The average target price of $64.09 per share implies 6.5% upside versus the August 13 close.
The AI translation of this story was reviewed by a human editor.
