Business Services - Takeaways From The Truist Securities Industrials & Services Conference

Research evidence excerpt

Business Services - Takeaways From The Truist Securities Industrials & Services Conference

ital Markets Day.

Booz Allen Hamilton Corporation (BAH, Hold)

 We met with IR Dustin Darensbourg and IR Erik Sorenson.

 BAH believes FY27 guidance is more conservative than last year's initial outlook. The company

had to lower guidance throughout FY26 after Civil issues, the shutdown, and general sluggish

procurement hurt more than expected. BAH sees improvement in the procurement environment, but

still not back to pre-2025 levels, and doesn't expect a return in the NT. Civil is forecast for high-single-

digits declines in FY27, which we think is fair. We note the current trend of shorter duration/lower

ceiling value recompetes in Civil, albeit easier y/y comps in 2H27.

 The company doesn't expect AI to drive full in-sourcing of coding abilities within the

government. BAH is confident in the ability to add value for customers in defensive cyber. Two

products are being launched shortly: the Vellox malware reverser and the Ranger cyber threat hunter.

Mgmt. stressed the AI model agnostic nature of the products, as AI models are made obsolete and

new ones emerge. We expect BAH to partner with tech companies that create models, rather than

develop proprietary models.

 We think BAH could be more aggressive on the M&A front. We believe the focus would be on

tuck-ins to help bolster the cyber and defense tech businesses. Despite the monthslong valuation

pressure in the gov't services group, BAH doesn't see peers pushing hard on share buybacks given

the Trump administration's stance. We think this could be adding to multiple contraction for the group.

CACI International Inc. (CACI, Buy)

 We met with CFO Jeffrey MacLauchlan, CTO Jason Bales, IR Jim Sullivan and IR George Price.