[ad_1]
With the federal government shutdown underway, Wall Street is parsing which contractors are most at risk and which may bounce back once a deal is struck. While a typical shutdown of a few weeks is unlikely to do lasting damage to government services firms, a protracted impasse could crimp backlog conversion, slow awards and weigh on cash flow for these companies, according to TD Cowen. “We’ve received many investor inbounds on the fundamental risk to govt services stocks if the federal gov’t budget impasse isn’t resolved for about a month,” TD Cowen analyst Gautam Khanna said in a note to clients. “We view the risk as fairly minor to sales/FCF. BAH & SAIC have tougher fundamental set-ups, but we believe their stocks have greater recovery potential once the shutdown’s conclusion becomes more visible.” CACI YTD mountain CACI year to date The Wall Street firm said CACI International , Leidos and Parsons enter the shutdown with enough funding “buffer” to avoid meaningful disruption. Parsons also benefits from its sizable non-U.S. business, further insulating it from the impasse. However, Booz Allen Hamilton and Science Applications International could be more vulnerable, according to TD Cowen. Booz Allen’s aggressive fiscal 2026 guidance and relatively low funded backlog leave it more fragile to near-term cuts if the shutdown drags on. SAIC has stronger backlog coverage, but its reliance on civilian agencies and the need for new contract wins to hit fiscal 2027 goals make it more exposed. Still, Cowen pointed out that these two stocks have already sold off the most over the past month, leaving them with greater recovery potential once a resolution is in sight. Booz Allen Hamilton shares have fallen 8% in the past month, while Science Applications International is down more than 16%. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
[ad_2]
Source link
