Leidos' (LDOS) revenue and margin growth are likely to improve in 2027 despite headwinds from a slump in Veterans Benefits Administration activity, RBC Capital Markets said in a Tuesday research report.

The company is increasing its exposure to energy markets and scaling investments to drive growth in defense and intelligence markets amid rising competition on its VBA contract, the analysts said.

RBC said it now expects 2026 adjusted EPS of $12.16, up from $12.11 earlier. For 2027, it expects adjusted EPS of $13.12, up from $12.71.

The company is positioned to benefit from higher defense spending in its core markets and as the investments ideally turn into better-than-peer growth, according to the note.

RBC reiterated its outperform rating on the stock and adjusted its price target to $215 from $230.

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