UPDATE: Credit Suisse Upgrades Leidos Holdings to Neutral, Raises PT Following Time with New CEO

In a report published Tuesday, Credit Suisse analyst Robert Spingarn upgraded the rating on

from Underperform to Neutral, and raised the price target from $30.00 to $35.00. In the report, Credit Suisse noted, “Having spent a day last week with new CEO Roger Krone, we feel that for the first time in a while Leidos is gaining some strategic direction. CEO Krone appears to be progressing smoothly through his internal review with a fairly clear sense of what he does and does not know about LDOS' various business lines, along with what seems to be a reasonable path forward. This strategy includes shoring up management at Healthcare with more experienced commercial business development personnel, selling some non-core units, such as the Plainfield biomass facility, and setting more realistic targets for investors (as per his reduced guidance in September). While we think it will take more time to see if these efforts translate to future growth, we are now less concerned about downside to shares, and upgrade to Neutral (from Underperform). Our TP rises to $35 from $30 (we remove the discount to the target peer FCF yield of 10%, and apply this 10% to our CY'15E FCF/share of $3.52).” Leidos Holdings closed on Monday at $34.89.