Goldman Sachs Downgrades Booz Allen Hamilton to Sell, Cuts PT

Goldman Sachs downgraded Booz Allen Hamilton Holding Corporation (NYSE:BAH) from Neutral to Sell on May 28. The firm also slashed the price target to $94 from $108.

According to the firm's analysts, Booz Allen Hamilton’s (NYSE:BAH) space for revenue and earnings growth is limited. As such, there is no incentive for investors to pile into the stock. A key factor that the analysts cited for the gloomy earnings expectations is that they anticipate pressures on federal civilian spending and shifting priorities within the Department of Defense (DoD).

Goldman Sachs also expressed concerns about potential risks to profit margins due to changes in contract structures. The firm noted that Booz Allen Hamilton (NYSE:BAH) trades at 17 times price-to-earnings and 12 times EBITDA on calendar year 2026 estimates. Goldman Sachs' analysis indicates that valuation levels could decline if Booz Allen Hamilton’s earnings fail to trend upward. The firm maintains a cautious stance, warning investors about potential downside risks to the stock’s future performance.

Interestingly, the downgrade comes just days after Booz Allen Hamilton (NYSE:BAH) reported robust Q4 and full-year 2025 earnings results. For instance, the company posted a record Q4 backlog of $37 billion and a trailing 12-month book-to-bill ratio of 1.39x. It also managed 12.4% revenue growth to $12.0 billion and adjusted diluted EPS of $6.35, a 15.5% increase.

Booz Allen Hamilton (NYSE:BAH) is a global consulting and technology firm. It provides a broad range of services that support defense, intelligence, civil government, and commercial sectors like healthcare, energy, and finance.

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Disclosure: None.