Leidos To Buy Entrust Solutions For $2.4B To Expand Energy Infrastructure

Stocktwits

Leidos Holdings Inc. (LDOS) on Monday signed a definitive agreement to acquire Entrust Solutions Group from Kohlberg in a $2.4 billion deal, in a bid to expand its energy infrastructure capabilities.

The acquisition will add new capabilities and effectively double the size of Leidos' $600 million energy infrastructure engineering business, which has grown on average at double-digit rates while delivering double-digit margins for the past eight years.

Leidos expects to fund the all-cash transaction through a combination of new debt, cash on hand, and commercial paper.

The transaction is expected to close by the end of the second quarter of 2026.

Deal Details

The transaction is expected to be immediately accretive to Leidos' revenue growth and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin and accretive to non-GAAP diluted earnings per share in 2027.

"ENTRUST's engineering capabilities and customer base perfectly complement ours, and it has a consistent track record of growth and strong profitability," said Leidos Chief Executive Officer Tom Bell.

"This deal is a bold step forward in support of Leidos' growth strategy and a national priority to expand America's energy infrastructure, while improving reliability and resilience against aging systems and extreme weather events," Bell added.

Engineering and technology for secure energy infrastructure is a strategic focus for Leidos under its NorthStar 2030 growth strategy.

U.S. utilities are projected to invest $1 trillion over the next decade in a modernization surge to meet growing demands for power and a national priority to strengthen and secure the U.S. electrical grid.

How Did Stocktwits Users React?

Retail sentiment around LDOS stock trended in the ‘neutral’ territory over the past 24 hours amid ‘high’ message volume.

Shares of the company have risen nearly 30% over the past year.

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Baker Hughes, Allied Gold and Newmont rise premarket; American Airlines falls

Investing.com

Investing.com -- U.S. stock futures slipped marginally lower Monday at the start of a week that includes a Federal Reserve meeting as well as earnings from several tech giants.

Here are some of the biggest premarket U.S. stock movers today:

Allied Gold (NYSE:AAUC) stock gained 3% after Zijin Gold International (HK:2259) agreed to acquire the Canadian headquartered gold producer in an all-cash transaction valued at approximately C$5.5 billion.
USA Rare Earth (NASDAQ:USAR) stock soared 22% after reports that the Trump administration was taking a 10% stake in the miner as part of a $1.6 billion debt-and-equity investment package.
Gold miners Newmont (NYSE:NEM) and Barrick Mining (NYSE:B) both climbed sharply as bullion prices surged to a record high of $5,100 an ounce, extending a historic rally driven by safe-haven demand amid geopolitical uncertainties and market volatility.
Shares of American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL) and United Airlines (NASDAQ:UAL) all fell by more than 1% on worries over possible flight delays and cancellations due to a heavy winter storm blanketing many American states.
Baker Hughes (NASDAQ:BKR) stock rose 2.2% after the energy services company reported an 11% rise in fourth quarter adjusted profit as demand for its gas technology equipment and services more than offset weakness in its oilfield services and equipment business.
Meta Platforms (NASDAQ:META) stock rose 0.6% after Redburn upgraded its stance on the Facebook owner to “buy” from “neutral”, saying the tech giant not only has the best ‘demand machine’ in the world, efficiently matching demand to supply, but is also best positioned to capitalise on two large AI opportunities.
Leidos (NYSE:LDOS) stock rose 0.7% after the defense contractor said it would buy power design firm ENTRUST Solutions Group from private equity firm Kohlberg for about $2.4 billion to bolster its engineering offerings for utilities.
Revolution Medicines (NASDAQ:RVMD) stock slumped 21% after the Wall Street Journal reported that Merck ended talks to acquire the biotech firm, citing people familiar with the matter.
Skywater Technology (NASDAQ:SKYT) stock gained 7.7%, with IonQ to acquire the company for $35.00 per share in a cash-and-stock transaction, implying a total equity value of approximately $1.8 billion.

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Leidos To Acquire ENTRUST Solutions Group For $2.4 Bln

dpa-AFX

Leidos

+0.93%

WASHINGTON (dpa-AFX) - Leidos Holdings, Inc. (LDOS), a technology and engineering services provider, said on Monday it has agreed to acquire ENTRUST Solutions Group from Kohlberg for approximately $2.4 billion in cash, expanding its presence in the energy infrastructure market.

ENTRUST provides engineering services across the full power delivery value chain, from generation to transmission and distribution, serving both gas and electric utilities.

The transaction is expected to immediately boost Leidos' revenue growth and add to adjusted earnings per share in 2027.

Leidos said the acquisition will roughly double the size of its $600 million energy infrastructure engineering business and expand its utility customer base.

Leidos plans to fund the acquisition through a combination of new debt, cash on hand and commercial paper. The transaction is expected to close by the end of the second quarter of 2026.

Leidos shares closed at $191.23 on Friday, down 1.15%.

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Leidos, OpenAI Team Up to Build AI for Federal Agencies

Dow Jones Newswires

Leidos

+0.93%

By Kelly Cloonan

Leidos and OpenAI are partnering to build artificial intelligence for customers including federal agencies.

The companies said Thursday they plan on integrating generative and agentic AI into the core workflows of customers in the digital modernization, health services, national security and defense industries.

The collaboration aims to improve how federal agencies operate, boosting productivity and accelerating product development, Leidos' Chief Technology Officer Ted Tanner said.

News Corp, owner of The Wall Street Journal and Dow Jones Newswires, has a content-licensing partnership with OpenAI.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

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Spotting Winners: General Dynamics (NYSE:GD) And Defense Contractors Stocks In Q3

Stock Story

As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the defense contractors industry, including General Dynamics and its peers.

Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds.

The 14 defense contractors stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.4% while next quarter’s revenue guidance was in line.

Luckily, defense contractors stocks have performed well with share prices up 13.3% on average since the latest earnings results.

General Dynamics

Creator of the famous M1 Abrahms tank, General Dynamics develops aerospace, marine systems, combat systems, and information technology products.

General Dynamics reported revenues of $12.91 billion, up 10.6% year on year. This print exceeded analysts’ expectations by 3.1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ backlog and revenue estimates.

"Each of our four segments grew earnings and backlog in the quarter, reflecting solid execution coupled with growing demand," said Phebe Novakovic, chairman and chief executive officer.

Interestingly, the stock is up 5.9% since reporting and currently trades at $361.53.

Best Q3: RTX

Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.

RTX reported revenues of $22.48 billion, up 11.9% year on year, outperforming analysts’ expectations by 5.4%. The business had a stunning quarter with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 20.6% since reporting. It currently trades at $194.15.

Weakest Q3: AeroVironment

Focused on the future of autonomous military combat, AeroVironment specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.

AeroVironment reported revenues of $472.5 million, up 151% year on year, exceeding analysts’ expectations by 0.5%. Still, it was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 31.7% since the results and currently trades at $371.34.

Read our full analysis of AeroVironment’s results here.

Mercury Systems

Founded in 1981, Mercury Systems specializes in providing processing subsystems and components for primarily defense applications.

Mercury Systems reported revenues of $225.2 million, up 10.2% year on year. This number beat analysts’ expectations by 9.5%. It was an exceptional quarter as it also logged a solid beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates.

Mercury Systems achieved the biggest analyst estimates beat among its peers. The stock is up 28.3% since reporting and currently trades at $97.10.

Read our full, actionable report on Mercury Systems here, it’s free.

Leidos

Formed through the split of IT services company SAIC, Leidos offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.

Leidos reported revenues of $4.47 billion, up 6.7% year on year. This print topped analysts’ expectations by 4.1%. Overall, it was an exceptional quarter as it also recorded a solid beat of analysts’ backlog estimates and an impressive beat of analysts’ EBITDA estimates.

The stock is flat since reporting and currently trades at $194.56.

Read our full, actionable report on Leidos here, it’s free.

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Why Leidos (LDOS) Stock Is Up Today

Stock Story

Leidos

+0.93%

What Happened?

Shares of defense contractor Leidos jumped 6.2% in the afternoon session after positive news from a peer company sparked a rally across the defense technology sector, with an analyst price target increase providing further support.

The interest in defense and government IT stocks grew after competitor Parsons announced a new $392 million federal contract. This news pulled investor attention toward the sector, leading traders to invest in established names. Leidos, viewed as a barometer for the federal IT space, benefited from this shift in focus. Adding to the positive sentiment, Argus raised its price target on Leidos to $225 from $210 and maintained its Buy rating on the stock.

What Is The Market Telling Us

Leidos’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 12 months ago when the stock dropped 7.5% on the news that peer, CACI, reported fourth-quarter earnings results, with markets increasingly worried that new cost-cutting initiatives by the US government would affect Defense contracts.

Although CACI reported a strong quarter with revenue, EBITDA, EPS ahead of Wall Street's expectations as well as a statement that they're well on their way to meet the three-year financial targets unveiled during the November 2024 Investor Day, the market became fearful of the impact of DOGE during the earnings call Q&A session. DOGE or the Dept of Government Efficiency was recently established by President Donald Trump as a result of his frustration with government bloat and inefficiency. A primary objective is to streamline federal operations and significantly reduce government spending, with a target of cutting up to $2 trillion over the next decade. For example, DOGE plans to reassess and renegotiate existing Department of Defense contracts to achieve cost savings, and this could lead to reduced contract values or more stringent terms for defense contractors such as CACI and others.

Additionally, there will likely be efforts to reduce the size of the federal workforce, which may result in fewer government personnel overseeing and managing defense contracts. This could slow down procurement processes and delay project approvals, impacting contractors' operations. Defense contractor stocks have seen multiple compression since President Trump first introduced DOGE, and yesterday's CACI earnings call had multiple questions related to the topic that seemed to make the market more fearful that DOGE will indeed be a headwind to CACI and peers.

Leidos is up 6.6% since the beginning of the year, and at $195.54 per share, it is trading close to its 52-week high of $199.55 from November 2025. Investors who bought $1,000 worth of Leidos’s shares 5 years ago would now be looking at an investment worth $1,908.

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Defense Contractors Stocks Q3 In Review: Mercury Systems (NASDAQ:MRCY) Vs Peers

Stock Story

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how defense contractors stocks fared in Q3, starting with Mercury Systems .

The 14 defense contractors stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.4% while next quarter’s revenue guidance was in line.

While some defense contractors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.7% since the latest earnings results.

Mercury Systems

Founded in 1981, Mercury Systems specializes in providing processing subsystems and components for primarily defense applications.

Mercury Systems reported revenues of $225.2 million, up 10.2% year on year. This print exceeded analysts’ expectations by 9.5%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ organic revenue and EPS estimates.

“We delivered Q1 results that were ahead of our expectations, with solid year-over-year growth in backlog, revenue, adjusted EBITDA, and free cash flow. Our ability to accelerate deliveries on a number of our customers’ high-priority programs once again contributed to strong results this quarter,” said Bill Ballhaus, Mercury’s Chairman and CEO.

Mercury Systems scored the biggest analyst estimates beat of the whole group. The stock is up 3% since reporting and currently trades at $77.96.

Best Q3: RTX

Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.

The market seems happy with the results as the stock is up 16.4% since reporting. It currently trades at $187.34.

Weakest Q3: AeroVironment

Focused on the future of autonomous military combat, AeroVironment specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.

As expected, the stock is down 8.7% since the results and currently trades at $257.38.

Read our full analysis of AeroVironment’s results here.

Leidos

Formed through the split of IT services company SAIC, Leidos offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.

Leidos reported revenues of $4.47 billion, up 6.7% year on year. This result beat analysts’ expectations by 4.1%. It was an exceptional quarter as it also produced an impressive beat of analysts’ backlog estimates and a solid beat of analysts’ EBITDA estimates.

The stock is down 5% since reporting and currently trades at $183.41.

Read our full, actionable report on Leidos here, it’s free for active Edge members.

General Dynamics

Creator of the famous M1 Abrahms tank, General Dynamics develops aerospace, marine systems, combat systems, and information technology products.

General Dynamics reported revenues of $12.91 billion, up 10.6% year on year. This print surpassed analysts’ expectations by 3.1%. Overall, it was a very strong quarter as it also put up a solid beat of analysts’ backlog estimates and a solid beat of analysts’ revenue estimates.

The stock is flat since reporting and currently trades at $342.60.

Read our full, actionable report on General Dynamics here, it’s free for active Edge members.

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