What Happened?
Shares of government engineering solutions provider Amentum Holdings (NYSE: AMTM) jumped 3% in the morning session after its subsidiary, Jacobs Technology Inc., was awarded a contract by the United States Space Force with a ceiling value of $4 billion. The 10-year contract, awarded to its wholly-owned subsidiary Jacobs Technology Inc., will support the U.S. Space Force's mission to modernize its Launch and Test Range System. Under the agreement, Amentum is expected to provide a comprehensive range of services, including systems engineering, cybersecurity, integration, logistics, and program management. This significant award reinforces the company's role in supporting the nation's space objectives, aiming to enable efficient, high-capacity spaceports and deliver engineering solutions to protect national security.
After the initial pop the shares cooled down to $25.56, up 1.6% from previous close.
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What Is The Market Telling Us
Amentum’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 3.2% on the news that the company received price target upgrades from multiple Wall Street analysts, including BofA Securities and Goldman Sachs.
BofA Securities raised its price target to $27 from $26, highlighting the market premium given to Amentum for its 'nuclear exposure.' This refers to the company's work in the nuclear market, which is increasingly seen as a key solution for powering energy-intensive artificial intelligence (AI) data centers. Goldman Sachs also boosted its price target to $26 from $21. While BofA maintained a Neutral rating, it acknowledged Amentum's diverse portfolio and improving free cash flow. The positive analyst actions add to recent reports of growing interest from institutional investors, signaling broader confidence in the company's strategic positioning.
Amentum is up 18% since the beginning of the year, but at $25.56 per share, it is still trading 23.5% below its 52-week high of $33.40 from November 2024. Investors who bought $1,000 worth of Amentum’s shares at the IPO in September 2024 would now be looking at an investment worth $866.20.
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