Leidos's earnings are likely to face a headwind from slowing growth in Department of Veterans Affairs Compensation and Pension exams, writes Stifel analyst Jonathan Siegmann, who downgrades the stock to hold. The exams, which determine disability benefits for veterans, are estimated to contribute more than 30% of Leidos's consolidated earnings, up from 5% in 2022, Siegmann writes. "After 3 years of driving strong growth, we expect modest revenue and margin declines from LDOS's C&P exams," he writes, noting that the exams are estimated to be more than three times as profitable as Leidos's other revenue streams, and that a slowdown will disproportionately hit earnings. The slowdown is likely to be reflected in the company's 2026 guidance, expected in February, he writes. (elias.schisgall@wsj.com)

(END) Dow Jones Newswires

January 08, 2026 11:11 ET (16:11 GMT)

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