Booz Allen Hamilton (BAH) PT Raised to $11.50 at Raymond James

Raymond James analyst Brian Gesuale raised the price target on Booz Allen Hamilton (NYSE: BAH) to $11.50 (from $11.00) while maintaining a Outperform rating.

The analyst comments "We reiterate our Outperform rating on shares of HTBK and raise our price target to $11.50 following very strong 3Q25 results. We see significant tailwinds for its business, in light of an improving growth outlook, NIM expansion tailwinds, its strong core deposit base, significant excess capital, and positive operating leverage. To the first point, loan growth was solid at a +5% ann. pace and was balanced between C&I and CRE despite headwinds within its SFR and construction portfolios, where loan yields remain solid. Deposit growth was even more impressive at 13% ann., driven predominantly by NIB (+31% ann.), demonstrating market share gains across its footprint. The combination of improving loan yields, remixing AEA, and improving funding costs led to more NIM expansion than expected (+6 bp q/q) and the NII beat. We expect NIM to continue to expand even inclusive of Fed cuts, given favorable repricing and remixing tailwinds. Core expense control was notably strong, which supported positive operating leverage, a sub-60% efficiency ratio, and a +1% ROAA. We also highlight its defensive posture, in light of its strong historical asset quality (just 10 bp of NPAs), disciplined underwriting, excess liquidity (cash = 13.3% of assets), and strong balance sheet (13.2% CET1, 9.7% TCE). This provides the bank with significant optionality and financial flexibility, where we incorporate modest buybacks in our model, and believe opportunistic M&A could be on the table, although we note it remains an attractive potential partner itself. Based on our updated forecasts, we expect the bank to generate a ~1% ROAA in 2026 and remain above that level in 2027, supporting low-double digit ROATCE, and continued positive operating leverage. All in, combining the improving profitability profile and conservative positioning with its well-covered 4.8% yield and scarcity value for banks its size in its markets leaves the risk-reward favorable in our view."

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