RBC Capital has revised its price target for Amentum (AMTM, Financial), moving it down to $22 from the previous $24, while maintaining a Sector Perform rating on the stock. This update is part of a comprehensive assessment of the Aerospace & Defense industry's first-quarter prospects.
Investor confidence in defense stocks, including Amentum, is on the rise due to anticipated growth in fiscal year 2026 revenue projections. This optimism somewhat offsets existing concerns regarding DOGE and legacy program risks. Although the pathway to a $1 trillion defense budget has yet to be clearly defined, RBC Capital anticipates that Republican leaders in Congress will advocate strongly for increased defense spending.
Despite the forecasted increase in defense expenditure, the trade war escalation has tempered enthusiasm within the commercial aerospace sector, particularly affecting original equipment manufacturers like Airbus (EADSY) and Boeing (BA). Furthermore, the looming threat of a recession serves as an additional challenge for aerospace OE stocks.
